The student loan legislation we were worried about has passed. The $18 billion in subsidies cuts has turned into $20 billion. Unlike what the Congressional Democrats promised, only $11.4 billion will go to increased Pell Grants for students. You might be wondering about the other $8.6 billion. Some of it will be redirected to deficit reduction – which isn’t the student aid the Congressional Democrats promised.

The interest rate cut is halved, but it’s only good for (surprise!) four years. You get to go through this garbage again during the next Presidential election. The Democrats have thoroughly politicized the student loan process, so you can count on this kind of instability for future election cycles.

The system of auctions has been foisted upon your parents. They’re the ones who get to collect lenders instead of you. Maybe Senator Kennedy should print up lender trading cards to help your folks keep track of the Lender du Jour.

Lender loan origination fees, which had been 0.5% are doubling. Those are the origination fees that many lenders used to waive. Well, start your wallets, kids, because they’re going up, and you’re going to be paying for them. This is exactly what I’ve predicted. The Feds will be shoving off all of their administrative costs to you, the borrower. Going to college is going to be much more expensive from now on. If you haven’t prepared well, Senator Kennedy’s “subsidies cut” is going to come as a rude surprise. He’s not cutting the lenders’ subsidies. He’s cutting yours.

This kind of legislation is irresponsible. The Congressional Democrats used a bazooka to swat a fly. No one is saying that the student loan industry could have used reform. What industry can’t? But there were many mechanisms available to solve the real problems without resorting to the near-complete devastation of the entire industry.

In the end, it’s you, the borrower and you, the taxpayer who will be held responsible for the Congressional Democrats’ mistakes. Prepare yourselves for the next four years because it’s going to be a rough ride. Remember this as you work your way through this system, and don’t forget to vote in 2012.