By Richard Vedder
A depressing development has occurred this morning. The chair of the Higher Education Commission, Charles Miller had added some factually accurate and refreshing comments to the third draft report of the commission, a report to which alm0st all commissioners indicated they are prepared to sign. In his comments, he noted the positive role played by the private, unsubsidized lending market. He noted that "a private sector education lending market has fully developed (separate and distinct from loans subsidized by the federal government and made by private financial institutions)." and added "The Commission notes that wider recognition and wider utilization of these options by many families would result in the private sector providing more funding for higher education and in freeing scarce public funds on aid for economically disadvantaged students and families." Neal McCluskey, at CATO, for one, approvingly wrote about this passage.
Now Mr. Miller has told commissioners he wants that last sentence sentence removed. Why? Apparently pressure from the student loan community, broadly defined. If the Commission bows to political pressure even before they vote, how can they be the slightest bit effective in pushing for the implementation of their already rather mild, non-radical reforms? In my previous blog this morning "The Best of Times, Worst of Times," I predicted that the lending community would do everything it could to stop some proposed reforms. I didn't realize, however, however, that they would even water down the recommendations before they are even voted on.
My vote on the Commission report is now in the "undecided" camp, on principle. As Chairman Miller has indicated to me in conversation, the removed section says nothing substantive. But the broader issue is, if a group of persons can pressure him into caving on something as small as this, what will happen after the report is approved? I am very discouraged, and hope others who agree with me will register their displeasure with Mr. Miller. His e-mail is CM494@aol.com