Ballooning student loan debt has become a critical issue for American families who have struggled through the recession to balance those loans with other payments and obligations as they try to make ends meet. Loan debt has increased exponentially in the last 20 years, and in 2011, total student loan debt exceeded $1 trillion for the first time. Despite public protests, Republicans have largely ignored the issue and opposed plans to fix the problem.
One of the attempts to address rising student loan costs was buried in the Affordable Care Act, the health reform law signed by President Obama two years ago. That provision cut large banks out of the federal government’s student loan program, and since it passed, Republicans have taken to calling it a “government takeover” of the student loan industry. Asked what he would do about student loans at a town hall in Ohio today, GOP presidential candidate Mitt Romney took the same approach, decrying the “government takeover” while saying he wished he could find “free money” to help people with their student loans:
ROMNEY: I wish I could tell you that there’s a place to find really cheap money or free money and pay for everyone’s education, but that’s just not going to happen. … I’d like to see more competition in the lenders. Now the government is taking over the student loan business, I think you’ll get less competition. I’d rather have more competition with private lenders as well as governmental lenders.
The “government takeover” of student loans, as Romney surely knows, isn’t really a government takeover at all. The private loan industry still exists; loan reform only takes banks out of the federal loan process. And that reform did, in fact, provide “free money” to students by taking billions from big banks that were acting as middlemen managing the federal loan program and giving it back to students. The reform plan both saved taxpayers money and pumped an extra $100 billion into the economy thanks to the increased earnings of students who could take full advantage of the Pell Grant program.
“I know there will be some who get up in a setting like this and give you a bunch of government money, free stuff,” Romney said. “That’s not who I am.” Instead, Romney appears ready to make student loans more expensive by taking money away from students and giving it back to Wall Street.