Doug Lederman has an interesting piece in Inside Higher Ed today giving a rundown of the winners and losers in the student loan reforms going on in Congress now.
No big surprises here. The winners include the Obama administration, Low-income students, and historically black colleges. The losers include private lenders, online courses, state officials, and “bipartisanship on higher education policy.”
Oddly, though, it’s a little unclear if student borrowers have actually won much by these reforms. As Lederman explains:
As monumental a change as the shift to 100 percent direct lending is, it has little to no direct implication for student borrowers. But two other aspects of the final legislation will affect students — one negatively, one positively. Omitted was an estimated $3 billion that would have kept the interest rate that borrowers pay on their federally subsidized loans at 3.4 percent…. But added very late in the process were provisions — part of President Obama’s 2011 budget proposal — that would expand the new income-based repayment program that caps a borrower’s loan payments at a certain proportion of his or her annual income.
It’s probably a little early to tell but it looks like what these changes mostly do is render higher education funding more efficient. The cap on loan payments isn’t bad though and it’s pretty hard to consider it, you know, welfare.