Romney’s student loan plan: Give banks more money, for some reason

Updated

The Romney campaign’s position on student loans has even conservative analysts shaking their heads in bafflement.

“Here is a really, really, really stupid policy,” said Rachel Maddow on Tuesday’s The Rachel Maddow Show. She was referring to the federal government’s method of subsidizing student loans before Congress passed reforms in 2010. Essentially, the government, instead of directly subsidizing college students’ tuition, gave the money for doing so to banks.

“The government said, ‘You loan money to students, and we promise that you will get the money back,’” explained Rachel. “Even if the students don’t pay you back. ” Or, to sum it up: “The bank gets paid, no matter what, for providing nothing. The government is providing the loan; the bank is just being given a guaranteed profit, at no risk, to pretend like it’s their loan. When it’s not.”

In 2010, that changed when President Obama signed a low that, in the words of Maddow Blog’s Steve Benen, “removed the middleman,” and saved somewherein the ballpark of $60 billion by not paying out needless interest to banks.

Given Romney’s espoused preference for fiscal conservatism, that $60 billion figure makes his nostalgia for the old student loans system especially baffling.

That’s right: As the Boston Globe reported on Monday, Romney’s campaign has announced that their candidate would like to bring banks back into the student loan subsidy system. Even conservative education experts are flummoxed by that one. Jason Delisle, a registered Republican and director of the New America Foundation’s Federal Education Budget Project, told the Globe, On this issue, Romney is just ridiculous.”

If you’re the Republican presidential candidate, there are two reasons this position might make sense: one is if you intend to just take a position contrary to Obama’s on every single issue, no matter how absurd. The other is if you want to find new avenues for enriching massive banks, at the expense of everyone else.

Explore:

Romney's student loan plan: Give banks more money, for some reason

Updated