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May 28, 2009

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Watchdog

You raise an appropriate question about "what reassurances the Dept. of Education can provide to those borrowers who see the headlines today and wonder whether this specific forgiveness program can be counted on for the long-term."

It would help if the newspaper articles explained that programs like those in Kentucky, Iowa, Pennsylvania, and elsewhere were illegally conceived and financed. The underlying concept was to offer borrowers inducements -- illegal but winked at by the Bush Administration -- so as to keep both Direct Lending and Sallie Mae out of their respective states. Much of the financing was also illegal: 9.5 guaranteed loans created out of thin air, which eventually was cut off because of taxpayer outrage.

The new federal loan forgiveness program is legal. Funding is from Congress, in the mandatory category. That is a far cry from the houses of cards built by the state agencies and non-profits.

Congress needs to clear away the stench created by these entities either by doing away with them or reforming them in such a way that they can never do this again.

Bizzaro Watchdog

Speaking of illegal, how is it that public-service workers are the only ones who benefit from federal (taxpayer) largesse? Last time I checked, Congress could spend other people's money for the general welfare (meaning that all citizens must benefit from the spending). How is it that all citizens benefit from a narrowly-tailored "forgiveness program" benefiting public-service workers only? Moreover, what's especially distressing about this "forgivenss" program is that public-sector employee salaries now rival those found in the private sector. Could it be that Congress is doing what Congress does best--buying the votes of an organized voting block?

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