Plan of Fiscal Panel Chairs Calls for End to Student Loan Subsidy

November 11, 2010

The chairmen of an Obama administration panel charged with finding a viable path forward for the nation's economy have proposed a series of massive spending cuts and tax code changes -- and while their proposal suggests some changes to which many in higher education would object, it would treat colleges and students comparatively kindly. The proposal by the co-chairs of the National Commission on Fiscal Responsibility and Reform, the panel asked to propose economic restructuring that would end the U.S.'s massive deficit, includes among the $100 billion in "illustrative" domestic spending cuts it identifies the elimination of the in-school subsidy for student loans, funds that the federal government pays to colleges to administer the campus-based student loan programs, and all Congressional earmarks, including the many awarded to colleges for research and transportation projects. But at a more global level, the co-chairs' plan -- while recognizing the need to slash "inefficient" federal spending -- calls for generally protecting education and "high value" research that promote economic development.

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