Pelosi Crows About Bill Reducing College Costs

Um, yeah. Let's take a look at this press release on Nancy Pelosi's Blog, The Gavel:

The House has passed the College Cost Reduction Act of 2007, H.R. 2669, by a vote of 273-149. The bill will provide the single largest increase in college aid since the GI bill in 1944. The legislation invests about $18 billion dollars over the next five years in reducing college costs, helping millions of students and families. It comes at no new cost to taxpayers, and is funded by cutting excess subsidies paid by the federal government to lenders in the student loan industry.

Of the four sentences in the paragraph, only the first is absolutely true, the second is mostly true and the last two are complete junk.

First, yes, the House passed the bill. Hooray! The bill is not likely to survive the Senate intact. Second, it may be the single largest increase in college aid, but I doubt it is the largest since the GI Bill, there were lots of college spending bills in the sixties and seventies and once adjusted for inflation, I think those bills are likely to be bigger. But I will grant Pelosi this one.

But the last two sentences are utter crap. The third sentence claims the bill will reduce the costs of college for "millions of students and families." How, by providing subsidies through those students to the schools. As many an economist will tell you subsidies do nothing but drive up costs for everyone else, what you get is an ever increasing cycle of costs in higher education. The schools can charge more for tuition, fees, room and board because, hey, the taxpayer is footing the bill. There is no incentive for schools or families to keep costs down because it is not coming out of their pocket directly. If the House really wanted to reduce the costs of college for students and families, they could do it by funding more R&D at the college level so schools get research grants and/or getting out of the college grant business.

The last sentence claims there is no cost to taxpayers. Uh...wrong!! Wrong!!! So absolutely, completely and utterly WRONG!!!!

Where do those subsidies for student loan lenders come from? Right, taxpayers. It is not like the House is funding this bill from their own pockets--oh wait, those pockets are filled by taxpayer money too.

Look, I like encouraging people to go to college and I am the beneficiary of government sponosored loan programs. But I have to pay those loans off and will be doing so for 30 years (law school at a private school is expensive). I am also not saying that the bill is a bad idea, but I don't want to be lied too. The bill will not reduce costs and it certainly is not free for the taxpayers.