Less noticed amidst the health care hubbub, and the imaginary "government takeover" of health care, is the real government takeover of the student loan industry. President Obama has signed legislation providing that, instead of guaranteeing repayment of student loans from private banks, the government will lend money to students directly.
It's about time. The prior system was a miniature version of last year's bank bailout -- it had the same feature of privatizing profit while socializing losses. Why should banks get the profits from student loans while the government bears all the risk of nonpayment? It was high time to cut out the middleman.
Predictably, Republicans are speaking against the new system as a government takeover of business that ought to be private. But really, if businesses want private profits, they should have to bear the business risks too. Government-guaranteed student loans were pretty close to pure corporate welfare.