But if the forum was a bit one-sided, New America can't really be faulted; MaryEllen McGuire, who directs the foundation's Education Policy Program and moderated the event, noted that four loan industry officials had turned down the chance to appear, and the person who took her up on the unenviable request, the lobbyist Scott Fleming, joked that he had "always said I'd walk on broken glass for [McGuire], and this may be as close as I get."
Those who demurred probably figured that this was a thankless time to be defending a guaranteed loan program that has taken a pounding from (in rough order) a heavily publicized controversy over potential conflicts of interest, a Congress that has sucked profits from it since 2006, the near-collapse of the financial markets, and now a proposal to more or less eliminate it. Robert Shireman, who as a consultant to Education Secretary Arne Duncan is widely seen as the architect of the administration's loan plan, was the featured speaker at Tuesday's event, and he laid out the most complete public case yet for the proposal. (A Webcast of the event can be seen here.)
The administration's plan, Shireman said, would use the most efficient and cost-effective method of raising money -- auctions of U.S. Treasury bills -- to get capital to make the loans. It would originate and disburse the loans using the government's existing system for distributing Pell Grant funds to colleges and collecting data about students from them, an "easy add-on" to a system that works.
And, perhaps most importantly, and in starkest contrast to the current system, he said, the student loans would be "serviced" -- the process by which loans are collected and student borrowers are helped on the sometimes rocky road to repayment -- "by the best servicers based on customer service and preventing defaults." The government would force companies and/or state agencies -- many of the same parties that are now in the guaranteed loan program -- to compete for contracts to service loans, and "those that can't compete, are not doing a good job, then they get less business.More details links.....
