Tags: student | loan | rates | costs | cato

Cato Institute's McCluskey: Rise in Student-Loan Rates May Lower Education Costs

Thursday, 11 Jul 2013 06:57 PM

By Bill Hoffmann

  Comment  |
   Contact Us  |
|  A   A  
  Copy Shortlink
The controversial doubling of student-loan interest rates could actually help stem the rising costs of a college education, according to Neal McCluskey, associate director of the Center for Educational Freedom at the Cato Institute.

"College costs have skyrocketed for decades beyond even healthcare ... because people pay with other people's money, mainly through the federal government, heavily-subsidized loans, [and] federal grants," McCluskey told “The Steve Malzberg Show” on Newsmax TV.

Story continues below video.

"So the more people pay with their own money, the better it is to get rational pricing," he said.

Loan rates are doubling from 3.4 percent to 6.8 percent after an effort to restore the lower rates has failed in the Senate.

The White House and most Senate Democrats favored restoring interest rates to 3.4 percent for another year, but lawmakers Wednesday were unable to muster the necessary 60 votes to overcome a procedural hurdle.

McCluskey said the government initially became involved in student loans to help low-income students afford college.

"But very quickly, and probably even from the beginning, it was driven primarily by political interests," he said.

"And what's in the interests of politicians is to give out as much of other people's money as they can to people who want to go to college or think they may want to go ... because then you're essentially buying their votes.

"No doubt there [are] still people who think we need to supply this money to make college affordable, but … the main effect of this is just to pump up prices to ridiculous levels."

The Cato Institute is a public policy think tank dedicated to the principles of individual liberty, limited government, free markets and peace.

See the Steve Malzberg Show on Newsmax TV each weekday live by Clicking Here Now

You can listen to the Steve Malzberg Show each weekday live from 3-6 PM ET on SiriusXM 244.

© 2014 Newsmax. All rights reserved.

  Comment  |
   Contact Us  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Retype Email:
Zip Code:
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Book: Obama Told Advisers to Find 'Way Out' of Defending DOMA

Friday, 18 Apr 2014 10:16 AM

President Barack Obama ordered his top advisers to find "a way out" of defending the Defense of Marriage Act, a new book . . .

Obama Touts $15M Solar Power Plan to Fight Climate Change

Friday, 18 Apr 2014 08:52 AM

The Obama administration has a launched a $15 million solar energy package in its battle to combat climate change.  . . .

Racist Online Forums Linked to US Hate Crime Spree

Friday, 18 Apr 2014 08:50 AM

A white supremacist charged with killing three people near two Jewish community facilities in suburban Kansas City this  . . .

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved