Government researchers continue to show that federal student loans are hazardous to both students and taxpayers. But Senate liberals don't seem to care, as long as the money keeps flowing to their constituents in the nonprofit academic world.

As the Senate prepares for Wednesday voting on student-loan subsidies, a coalition that includes congressional Republicans, President Obama and moderate Democrats favors reform that ties the rates on student loans to the 10-year Treasury rate. This protects taxpayers from having to guarantee...