Looking at the current instability in the student loan marketplace, it seems that most of the attention – including last week’s hearing – has focused on how to respond if and when the programs collapse. To me, the fundamental question is this: why are we planning for failure instead of trying to prevent it? The unfortunate reality of the subprime mortgage crisis was that no one saw it coming – at least, not in time to do something about it. Looking back, we know there were warning signs, but those signs were largely ignored. The lessons of the mortgage meltdown should not be lost as we examine instability in the student loan marketplace.

Last week, the Education and Labor Committee heard from the Secretary of Education and key student loan experts who offered a candid assessment of what can only be described as ominous warning signs about the future of our student loan programs. Translation – our student loan programs are faltering, and while a crisis has not emerged, the danger is real. Given this set of facts, it seems obvious that what we should be doing is attempting to stave off harm in the student loan market before it occurs.

This entry was posted on Tuesday, March 18th, 2008 at 1:48 pm and is filed under Politics, Economy/Budget .