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Nov. 20, 2009
Rabbi David Aaron: How to make every second of your life come first
Caroline B. Glick: Whither American Jewry
Nov. 19, 2009
Binyamin L. Jolkovsky: Please Listen to this Godcast (5 minutes)
Jonathan Tobin: ADL Crosses the Line with Report Bashing Obama Critics
Nov. 18, 2009
Rabbi Yonason Goldson: What Judaism has to say about the secret of the Mona Lisa's smile
JWisdom.com: The (Jewish) Dating Game with Rabbi Lawrence Hajioff (8 minutes)
Nov. 17, 2009
Steven Emerson: How Does the 4th Amendment Impact Terror Finance Investigations?
JWisdom.com: If Frank Sinatra married Edith Piaf with Rabbi Y.Y. Rubinstein (2 minutes) Life lessons from what would be regarded as the most inappropriate lyrics ever sung
Nov. 16, 2009
The Jewish Ethicist by Rabbi Dr. Asher Meir : When borrowing is stealing
JWisdom.com: Deconstructing faith with Rabbi Warren Goldstein (9 minutes)
Nov. 13, 2009
JWisdom.com Sarah's subjective reality with Rabbi Sroy Levitansky ( 6 minutes)
Caroline B. Glick: Obama's failure, Netanyahu's opportunity
Nov. 12, 2009
The Kosher Gourmet By Marialisa Calta : A sweet sweet potato treat
JWisdom.com Does God get tired? with Rabbi Harvey Belovski ( 5 minutes)
Nov. 11, 2009
Rabbi Avi Shafran: Jews and money: When anti-Semitism isn't
JWisdom.com Marriages are not made in Heaven with Rabbi Lawrence Hajioff (VERY fast 15 minutes)
Nov. 10, 2009
Michael Doyle: Author of book exposing CAIR ordered to remove supporting documents from Web
JWisdom.com If the creation so loudly shouts the existence of the Creator, why aren't more people believers? with Rabbi Naftali Brawer (9 minutes)
Nov. 9, 2009
Mark Steyn: Shooter exposes hole in U.S. terror strategy
JWisdom.com It's never too late to have a happy childhood with Sarah Chana Radcliffe (5 minutes)
Nov. 6, 2009
Rabbi Berel Wein: Choosing to hear
JWisdom.com Zero to 1/60th: How to Empower An Hour with Gavriel Aryeh Sande (7 minutes)
Caroline B. Glick The mullahs' big week
Suzanne Fields A Fallen Wall for Fallen Man
Nov. 5, 2009
The Kosher Gourmet: Three scrumptious -- but simple -- butternut squash dishes
JWisdom.com Hidden Hints: Unlocking Faith & Prayer with Rabbi Jay Yaacov Schwartz (10 minutes)
Nov. 4, 2009
Tom Hamburger and Kim Geiger: Should prayers be covered?
JWisdom.com When God played peacemaker With Rabbi Sroy Levitansky (5 minutes)
Nov. 3, 2009
Martin Peretz: Beware, Barack. Beware, Rahm. Beware, Axelrod
JWisdom.com Are you are closet idolater? With Sara Yoheved Rigler (10 minutes)
Nov. 2, 2009
Paul Greenberg: The Holocaust is now on Facebook
JWisdom.com Abraham's Strange Change With Rabbi Yitzchok Fingerer (5 minutes)
Oct. 29, 2003
Mortimer B. Zuckerman: Graffiti On History's Walls (MUST-READ!)

Jewish World Review April 15, 2009 / 20 Nissan 5769

Obama is Right about one thing

By Dick Morris & Eileen Mc Gann


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http://www.JewishWorldReview.com | If your philosophy is that government can do everything better than the private sector, eventually you'll luck out and hit one area where that otherwise nutty philosophy happens to be true. President Obama's plan to end private student lending and channel all loans through the direct federal program is the right way to proceed.


Ever since Bill Clinton initiated the direct student lending program, it has offered lower-cost loans to students and given them an alternative to the high-handed rip-offs to which they are exposed when the funding comes from private lenders. The special interests — particularly Sallie Mae, the leading student lender — forced Clinton to allow private lending alongside the government program. Now Obama is trying to eliminate it. And wisely so.


This issue has nothing to do with growing government. The taxpayer already subsidizes the interest rate and guarantees the loan, whether through direct public lending or private firms. The issue is: Should the lenders make a profit, or should the student pay a lower interest rate?


Private lenders charge more than the government does in interest and are particularly vicious in their collection practices. Even though the government pays them 97 percent of the principal and interest should a student default, the lenders vigorously pursue collection, since they get to keep more than half of whatever they get even after the feds have repaid them for almost the full value of the loan. These loans, which are not dischargeable in bankruptcy, may not be refinanced. Once you take out the loan, you are stuck, even if interest rates should drop decisively.


And the private student lending industry has been rife with corruption, as various lenders give personal gifts and philanthropic donations to colleges and universities in an effort to encourage them to steer needy students to private, not public, loans. This corruption has been exposed repeatedly by both former New York Attorney General Eliot Spitzer and the current A.G., Andrew Cuomo. Of course, the private lenders pay bribes to get college financial aid officers to recommend to unknowing students that they borrow from them. Why else would a kid pay more interest to get a private loan than a public one?


Particularly interesting is Obama's plan to recycle the savings from replacing the private program with a public one into the Pell student grant program. With almost $100 billion in savings projected over the next decade, the tradeoff is very attractive.


To battle against Obama's program, the private lenders have hired former Clinton Deputy Attorney General Jamie Gorelick to lobby against it. Gorelick has great credentials to fight for Sallie Mae. She sat on the board of Fannie Mae (no relation) as it piled up billions in subprime lending obligations and got out in time to collect millions in bonuses.


Before that, she made sure that the left hand did not know what the right hand was doing in the Justice Department anti-terror investigations. As a result, we could not open the laptop computer of the 20th hijacker and did not get the wire transfer data it contained for the other 19 hijackers until after 9-11. Now, she is capping off that brilliant career by trying hard to make kids pay more for college.


Republicans and some Democrats — who are beholden to Sallie Mae and other private lenders for their generous campaign contributions — will try to pretend that this issue is one of big government vs. small government. It is not. The issue, in its starkest terms, is high college costs vs. somewhat lower costs. Our kids, and their parents, deserve a break.

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.


JWR contributor Dick Morris is author, most recently, of "Fleeced: How Barack Obama and Hillary Clinton, Media Mockery of Terrorist Threats, Liberals Who Want to Kill Talk Radio, the Do-Nothing Congress, Companies ... Are Scamming Us ... and What to Do About It". (Click HERE to purchase. Sales help fund JWR.) Comment by clicking here.



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