There’s an announcement on the Department of Education web-site today that Under Secretary Sara Martinez Tucker is leaving her position, effective November 21. The press release doesn’t state why she’s leaving – only that she will be “returning home to California.”
Tucker’s responsibilities, which include implementing policy to make higher education more accessible and affordable, will be taken over by Kent Talbert, currently the Department’s general counsel.
Treasury Secretary Paulson today announced that he wants to use part of the remaining portion of the bailout fund to focus on consumer lending agencies, including student loan companies. From the Washington Post:
In a speech this morning, Paulson laid out his priorities for some $350 billion of the bailout fund that remains uncommitted. Much of the first half was used for direct capital investments into banks.
At least some of the remainder, Paulson said, should be used to reinvigorate the market for credit cards, student and auto loans — which combined account for some 40 percent of consumer credit.
“This market, which is vital for lending and growth, has for all practical purposes ground to a halt,” Paulson said.
The Higher Ed Watch blog warns today that Federal measures to deal with the “student loan crisis” (I put the term in quotes because their article reports that there is no crisis) might ultimately make things worse for borrowers:
We are particularly concerned that some policymakers, in giving in to the scare tactics employed by the student loan industry, may in fact be positioning student lenders, as well as high-priced colleges, to game the system to their advantage.
The writers take issue with several recent actions and rumors of action. Among them, they note that the government’s recent announcement that it will buy up more private student loans may be premature and point out that “there is no guarantee that lenders will use the help they get to make new loans.” They are also concerned with the proposal to increase loan limits:
To create more paths for students to go into further debt from which they have no way to get out from under is irresponsible and in most cases, unnecessary.
I couldn’t agree more.