Remember when the federal government took over student loans? That power grab was part of the Democrats’ push to make college ‘affordable.’ It didn’t work because it was never really designed to work, just to make people think they were ‘doing something’ to address the issue. But failure has never stopped our liberal/progressive friends from striving ‘forward.’
When it comes to soaring college costs, as President Reagan famously said, “Government is not the solution to our problem; government is the problem.”
Since the government isn’t going anywhere anytime soon, cost savings in higher education have to be found elsewhere. But with government being the intrusive, ever-growing obstacle it is, you can’t expect it to sit by and do nothing as schools scramble to rein in costs.
I was talking with an education policy analyst friend of mine the other day about how much more expensive college has gotten ever since I graduated in 2000, and we bounced ideas around about how to control costs in ways that don’t involve government. (Yes, that’s what many of us inside this beltway bubble talk about over drinks. The rest of you are missing nothing!)
While government subsidizing education is a lion’s share of the problem, one of the other issues we discussed is privatizing much of the administrative work. Just like in every public school district in the country, there is an enormous amount of overhead in the university system.
My friend told me about schools that were trying to control costs and the opening salvo of a move by progressives to stop even this modest effort.
About 1,600 schools across the United States have contracted with a company called Higher One to handle the disbursement of financial aid refunds to their students… Higher One saves these schools millions of dollars by disbursing these refunds at much lower costs than colleges can do it themselves. Needless to say, this helps slow the growth of tuition — making school more affordable to low-income and non-traditional students.
You’d think this would be applauded by politicians and The Left. You’d be wrong.
See, Higher One commits the sin of making a profit.
Many students on financial aid receive funds to cover both tuition as well as books and living expenses. Instead of universities cutting students a check for expenses, they contract with a company like Higher One to handle the money. Higher One gives students choices about how they want to receive the remainder of their student aid for living expenses. Students can opt for either a check in the mail, direct deposit into a bank account or a Higher One debit card that can be used like any other debit card. That’s where liberal opponents have decided to target Higher One.
What Higher One does is what MasterCard and every other bank does – charging fees for using their cards. Apparently, making money from students is against the rules.
That’s why Higher One has attracted some attention on Capitol Hill. Congressman George Miller (D-CA) is very interested in the activities of Higher One. Why? Because in his opinion, Higher One’s fees are too high.
Never mind the fact that if students only use Higher One ATMs and hit “credit” instead of “debit” every time they make a purchase (and don’t bounce any checks) they probably will never pay a fee. In fact, according to Higher One, the typical student pays less than $5 a month in fees. These facts don’t matter to Congressman Miller.
The reason for Miller’s sudden interest in this issue isn’t altruistic, it’s something all too common in Washington. Miller has a staffer named Rich Williams who, before handling education issues for the congressman, used to work for the Public Interest Research Group, or PIRG, which has a long history of left-wing advocacy through ‘studies’ they produce as a means to an end – advancing the progressive agenda.
While at PIRG, Williams wrote a ‘study’ about how the debit card fees charged by Higher One accounted for 80 percent of their profits. The PIRG story is wrong; the real number is less than 50 percent, but that’s irrelevant. After all, is there an acceptable percentage that PIRG and Rich Williams would accept? Probably not and they shouldn’t have the right to pick how much money any company can or cannot make.
But Williams’ work at PIRG, flawed and pointless as it is, is now being cited by Congressman Miller in his salvos against Higher One and, by extension, against colleges that attempt to reign in ballooning administrative costs.
Garbage in, garbage out is one thing. But when you can see that garbage is being used as the basis for government action, that makes it something entirely different. Today, the Department of Education is looking at debit cards issued by companies like Higher One. If Miller and Williams are successful, schools may be forced to stop working with these companies to process student loan refunds. That means schools will need to spend millions of dollars a year on unnecessary staff, check printing and postage costs. And oh yeah, tuition costs will probably go up because of it. I guess that’s ok with Congressman Miller and Rich Williams as long as no one dares make a profit.
I don’t know if Williams has it in for Higher One for some personal reason or if it was just what he was assigned to do while at PIRG, but it doesn’t matter. That the mentality he appears to possess is now working for the senior Democrat on the House Education and the Workforce Committee should be a concern for anyone who believes in the free market.
Williams is not unique. Capitol Hill, and government in general, is populated by people who come to serve not the public, but their own or some organization’s agenda. They have every right to. Just as we have every right to know about them, especially when they’re finding new and creative ways of costing taxpayers more money.