Responsibility #35

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=110 BGCOLOR="#666699" TEXT="#080000" bgproperties="fixed" background="04900840erlcjm.png"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Arial" ><B>NATIONAL SECURITY--Structural,Moral,Economic,Domestic,International</B></FONT><B>     |     </B><A HREF="index.htm" TARGET="_top" TITLE="NATIONAL SECURITYStructural,Moral,Econom"><U><B>home</B></U></A></div> <div> <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A>   |   <A HREF="id34.htm" TARGET="_top" TITLE="Responsibility 1"><U>Responsibility #1</U></A>   |   <A HREF="id35.htm" TARGET="_top" TITLE="Responsibility 2"><U>Responsibility #2</U></A>   |   <A HREF="id36.htm" TARGET="_top" TITLE="Responsibility 3"><U>Responsibility #3</U></A>   |   <A HREF="id37.htm" TARGET="_top" TITLE="Responsibility 4"><U>Responsibility #4</U></A>   |   <A HREF="id38.htm" 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to President, et al,"><U>Health Care Letters to President, et al, 8/24/94</U></A>   |   <A HREF="id123.htm" TARGET="_top" TITLE="Arguments for Delay in Enactment of a He"><U>Arguments for Delay in Enactment of a Health Care Bill</U></A>   |   <A HREF="id124.htm" TARGET="_top" TITLE="Post WORLD WAR IIPost COLD WAR Deja Vu"><U>Post WORLD WAR II--Post COLD WAR Deja Vu</U></A>   |   <A HREF="id125.htm" TARGET="_top" TITLE="Responsibility 89"><U>Responsibility #89</U></A>   |   <A HREF="id126.htm" TARGET="_top" TITLE="Responsibility 90"><U>Responsibility #90</U></A>   |   <A HREF="id127.htm" TARGET="_top" TITLE="Responsibility 91"><U>Responsibility #91</U></A>   |   <A HREF="id128.htm" TARGET="_top" TITLE="Responsibility 92"><U>Responsibility #92</U></A>   |   <A HREF="id129.htm" TARGET="_top" TITLE="Responsibility 93"><U>Responsibility #93</U></A>   |   <A HREF="id130.htm" TARGET="_top" TITLE="Responsibility 94"><U>Responsibility #94</U></A>   |   <A HREF="id131.htm" TARGET="_top" TITLE="Responsibility 95"><U>Responsibility #95</U></A>   |   <A HREF="id132.htm" TARGET="_top" TITLE="Responsibility 96"><U>Responsibility #96</U></A>   |   <A HREF="id133.htm" TARGET="_top" TITLE="Responsibility 97"><U>Responsibility #97</U></A>   |   <A HREF="id134.htm" TARGET="_top" TITLE="Responsibility 98"><U>Responsibility #98</U></A>   |   <A HREF="id135.htm" TARGET="_top" TITLE="The Structure of Our Nation is Unsound"><U>The Structure of Our Nation is Unsound</U></A>   |   <A HREF="id136.htm" TARGET="_top" TITLE="Ltr. to Editor, 3/19/96, Property Taxes "><U>Ltr. to Editor, 3/19/96, Property Taxes and Education Funding</U></A></div> <div> </div> </td> </tr><tr> <td valign="top" width=190 BGCOLOR="#CCCCFF" TEXT="#080000" background="04311c00egdysm.png"> <bR> </td> <td valign="top" height=370 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> Responsibility #35</div> <div> (written prior to July 1992)</div> <bR> <div> To the People of the United States of America:</div> <bR> <div>      We begin this paper with a discussion of government grants, and student loans, for post high school and college.  In contrast to the education of minors, there is no right nor responsibility for the family, or the government, to provide education beyond the twelfth grade.  The high school graduate must have earned, and must maintain, the right for further education by living up to the responsibilities entailed.</div> <div>  </div> <div>      As to funds for tuition, books, and living expenses, that should be left to each student, to the maximum extent possible. Those students who can should utilize funds from: their own savings, earnings from jobs during or between terms, scholarships and grants from non-government sources, family gifts or loans, or non-government supported loans that they can arrange with or without parents' cosignature.</div> <div>      In the 1992 election campaign, the incumbent President belatedly espoused the expansion of eligibility for federal student loans, and the establishment of a $25,000 line of credit for any American wanting more education.  President Bush also proposed expanding eligibility for guaranteed student loans and Pell grants for college, to individuals who take as little as one college course.  These actions of the President doubtlessly were due to concern for votes, vis' a vis' concern for the general welfare.  The proposals were reported to be similar to that of the front running opposition party candidate.  As usual in politics we are faced with "promise her anything, but give her Arpege".</div> <div>      Both candidates were irresponsible, in making such a promise. The nation is already glub glubbing in a sea of debt, which is rising in tidal wave fashion.  It is still in the early stages of bailing out failed, and failing, savings & loans and banks.  It could at any time hear the irresistible cries, for life preservers from marginally solvent insurance companies and pension plans. It already, in 1990, had explicit and implicit obligations to stand behind government-sponsored-enterprises loans of $1 trillion. Among the last is the Sallie Mae packaged student loan program, already suffering billions of dollars of uncollectible debts. Yet, it was proposed for wholesale increase by the desperate incumbent, and his reckless leading opponent.  Listen up America, don't let these wolves pull the wool over your eyes!</div> <div>      The severity of our federal indemnity commitments were touched upon in Responsibility #11, #12 and #14.  At this time, under laws already passed by the Congress and signed by the President, these commitments are burgeoning without limit.  The reader is referred to Thomas H. Stanton's book, "A State of Risk--Will Government Sponsored Enterprises Be the Next Financial Crisis?".</div> <div>   </div> <div>      In a later essay, we will discuss how (like the national deficit and national debt) the nation must begin NOW to stop the increases of, and begin to reduce, these second and third mortgages on the earnings of our children and children's children.  This means that if federally supported education loans are to be held at the present level or increased, the action must come at the expense of reducing government backed home loans and farmers loans.</div> <div>   </div> <div>      Expanding the eligibility, and providing lines of credit, for student loans will increase the difficulty of borrowing for non-government supported home loans, loans for small businesses, business working capital and capital equipment loans, car loans, credit card loans, etc.  This means less availability of loans, higher interest rates, tendency for higher inflation, lower economic growth rates, higher unemployment, greater vulnerability to recessions or depressions, etc.</div> <bR> <div>      If we are to have government supported student loans, and we must, the nation has to be sure that each one is viable, in the interests of both the general welfare, and the welfare of the borrower.  The general welfare is served, if each and every borrower receives a quality education. Quality means a curricula which prepares him or her for jobs, that promise to provide income sufficient, to pay off the loans plus accumulated interest, in a limited time period after graduation, taking into account the normal other demands on earnings during that time.   </div> <div>      The welfare of the borrower is served well, if he or she is evaluated and counseled, at the time of the loan application, and at any time that changes are considered in the curricula & employment plan upon which the loan is predicated.  The evaluation should include their aptitudes for, and the projected availabilities of, jobs in that field.  They must also be given an appreciation, of the burden that their loan payoff will be, in relation to their earnings potential.  </div> <div>      Having applied to government backed student loans, the same principle that would be expected to be wielded by a loan officer in a commercial enterprise to clear a loan application, the interest charged would normally be commensurate with the risk of the loan.  Because the federal government explicitly or implicitly guarantees the loans, the student loans bear relatively low interest rates.  We the People should have some "security", to minimize our risk assumption (like the shareholders of a lending institution) that the loans will be repaid, on the terms specified in the loan papers.  </div> <div>      Here, the example of our armed forces should be followed.  To insure that the taxpayers receive full benefit from higher education or training provided to officers, the officers must obligate themselves for a number of years of service for each year of education received.  In an analogous fashion, applicants for government supported student loans could be sworn into an "Economic Development Corps".  Other than an obligation to stick with their education curricula plan (or approved changes thereto), the EDC obligation does not come into play, until or unless the borrower fails to live up to his loan obligations after graduation.  </div> <div>      Upon the borrower's default on payments on his or her loan, the EDC after evaluating the situation may call the borrower to "active service".  The defaulter could be assigned to government organizations such as the armed services, the Peace Corps, social work in health or poverty programs, etc.  As a part of their compensation while in active service, the loan payments would be brought up to date, or payment completed.  With good prescreening for loans, the EDC would seldom be invoked, but would serve as a strong deterrent against responsibility lapses.    </div> <div>      We will complete the discussion of education in the next essay.</div> <div>                          Publius IV</div> <bR> <div> <A HREF="id69.htm" TARGET="_top" TITLE="Responsibility 36"><U>Responsibility #36</U></A></div> <div> Back to: <A HREF="id33.htm" TARGET="_top" TITLE="Responsibility Contents"><U>Responsibility Contents</U></A> </div> </td> </tr></table></body>