Friday, April 23, 2010

Obamacare student loan reform: No you can't?

In the final hours of sausage-making that produced our nation's "health care reform," an unrelated provision called "Student Loan Reform" was inserted.  Most media coverage has been predictably glowing, if you ignore the fact that President Obama killed the private student loan sector with the stroke of his executive pen.  The nation's largest private student lender, Sallie Mae, has announced that it will cut 2500 jobs and close multiple offices.

This monstrous takeover of another private business sector absolutely screams the question:  how will the government perform as the new student loan volume serviced increases from around $30 billion to $100 billion per year?  The not-so-sensational "cash for clunkers" program (a tiny fraction of the student loan program) comes to mind.

This week, I was informed that a family friend who is in her second year of graduate school at an esteemed institution of higher learning in the Southeast was informed that she was no longer eligible in the 2010-2011 school year for federal student loans that had made her education possible heretofore.  Here is the online message she received this week:
Based on the income and asset information you provided on the Free Application for Federal Student Aid (FAFSA) form, you are not eligible for federal student assistance during this academic year. If you have any questions about how this information was determined, please contact the Financial Aid Office using the E-Mail the Financial Aid Office link below.
She is a full-time honor student living on her own and working a part-time job with no substantive changes to her status since last year.  She also informs me that one of her friends from another local university was denied financial aid for summer school this week.

I realize that this does not constitute a statistically significant sample.  Hopefully it's just a mistake. But it does raise some serious concerns that another unintended consequence of Obamacare will be to disrupt the education of hard-working young American students just trying to get out there and make a difference.

Readers, please advise if you are aware of similar experiences.

1 comment:

  1. This is going to be a disaster. The college students actually helped Obama get elected are now getting their payback... Here is an interesting article regarding this 'new' program: