I never got why the gov't pays banks to make loans to students that are virtually guaranteed. I don't know if the government taking over the loan process is a good idea or not, but I do think it's a good idea to cut the bank subsidy. I mean, it's free money given to the bank for making a 6.8% guaranteed profit every year!

Who needs a loan to get their elementary school diploma? Okay, maybe a car loan to have a car to drive to class, but that's all we needed.

The Right

Um,

Not quite clear what Obama's complaining about here...students (and their parents) make the choice to take on these "crushing loans" which are usually at a reduced interest rate (max 6.8% and often lower) AND on which the clock doesn't start ticking until months after they graduate.

Students can't "bail" on the loans anymore via bankruptcy since the change in the bankruptcy laws (1998 & 2005) changed the way those loans are viewed. However, there is a "hardship" provision even in Bankruptcy court.

Yeah, there are some evil student loans out there at 11+% that aren't federally insured. But that is in part because the cap for those loans hasn't been raised for over 10 years (1992.) And that they were wrapped into the secured portion in 2005 of debt.

---
I teach at a private university and I have counseled some of my students over the past 28 yrs to consider transferring to a public school if they become concerned about their debt load. Otherwise, they worry more about their debt than their learning. Some do and some don't.

--
It is a case of being able to afford what you want, or making the decision to pay for it out of your "future" earnings. Living beyond ones means is a constant problem in our current society.

I had to take on some student loans in college. I taught for several years in a public school in a rural area to take advantage of the "teach and reduce the debt" provision and ended up only having to pay back a portion of my loan. Because I was willing to give back in terms of my time and knowledge gained. You know, "community service" before it was a popular thing...
---

Once again, not knowing of where he speaks. Isn't ignorance wonderful?

So it is just fine and dandy that the gov't controls the banks, the auto industry, the home mortgage industry, Wall Street and Student Loans.

So if you are not the right person--you get nothing.

Geez--

Like banks who service home loans for Freddie and Fannie don't get a service fee?? They do ya' know.

So it is just fine and dandy that the gov't controls the banks, the auto industry, the home mortgage industry, Wall Street and Student Loans.

Huh?

So what you are trying to say is obama is just talking crap because he really controls the banks. Why in the hell is he begrudging them if he controls them?

You are one dumb bird, one really dumb political hacking bird.

The real change to student loans need to be done with the bankruptcy code. Student loans are the only debt outside of criminal acts (fraud, criminal restitution) or bad acts (tort law such as drunk driver putting someone in a wheelchair for the rest of their lives) that are NON-dischargeable in bankruptcy FOREVER. The government has been known to garnish social security checks to get that money back.

Through Democrats say they are the ones trying to expand hire education opportunities, it was Bill Clinton that made the student loan laws the legal equivalent of a bad or criminal act in terms of bankruptcy protection. Knowing that you will be saddled to student loan debt forever no matter how the economy is or no matter what your personal circumstance is has more and more people every year reconsidering whether to even go to college at all and a great many optioning not to go college. This has the real negative impact on America being competitive in a global economy.

...students (and their parents) make the choice to take on these "crushing loans"... It is a case of being able to afford what you want... Living beyond ones means is a constant problem in our current society. -- #3 | Posted by daprof

Access to education shouldn't be limited by financial means -- it's not at all the same thing as access to better stereo equipment, nicer cars, etc. Apart from equity considerations, it's not good for the country to keep the best and brightest down simply because they don't have money.

I never got why the gov't pays banks to make loans to students that are virtually guaranteed. I don't know if the government taking over the loan process is a good idea or not, but I do think it's a good idea to cut the bank subsidy. I mean, it's free money given to the bank for making a 6.8% guaranteed profit every year!

#1 | POSTED BY BARTIMUS AT 2009-09-21 06:01 PM | REPLY | FLAG:

I think it stems from the fact that some students need loans to pay for their education. If they screw off and drink beer instead, which a large % do, then they default on the loan, making the bank really, really sad. So, if a chucklehead of 18 years is gonna get a loan, the govt. better guarantee it at some level. Otherwise, the interest rate would be huge, and frat-boy doesn't get educated and digs ditches.

I think that's why the govt. got involved. Shit, now they're just gonna take it over. Politicize this process, great. Wonder what majors come with the best interest rates?

"Shit, now they're just gonna take it over. Politicize this process, great. Wonder what majors come with the best interest rates?

Posted by somoco"

Why shouldn't they? Right now, the banks get the profits and the taxpayers bear the risk. Whoever bears the risk should get the profit.

1. It'll be clusterfuck, and underwritten by the taxpayer because the costs of the system won't be driven by profit.

2. There will be room for all kinds of shit. Those studying green technologies, and work in the field for 5 years will get their loans forgiven.... etc....

wait for it, it'll happen.

It socialism. Pure and simple.

'The Obama plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans.'

Sickening.

...students (and their parents) make the choice to take on these "crushing loans"... It is a case of being able to afford what you want... Living beyond ones means is a constant problem in our current society. -- #3 | Posted by daprof

Access to education shouldn't be limited by financial means -- it's not at all the same thing as access to better stereo equipment, nicer cars, etc. Apart from equity considerations, it's not good for the country to keep the best and brightest down simply because they don't have money.

#7 | Posted by Phoenix at 2009-09-21 07:08 PM | Reply | Flag

Since where is it denied from someone? A particular institution may be out of reach financially, "SAT-ically", geographically or in some other way of a particular person.

But people aren't denied a way to get an education. Many of the "football players" at my school are proof of that.

You may have to fill out a lot of paperwork or work a job or whatever, but there are PLENTY of schools that are accessible in price ranges from "FREE*" to "IVY LEAGUE".

Many states have programs that subsidize students to attend. FRAG in Florida, AccessUVa in Virginia as two examples. See California residents and colleges.

* --> see Berea College for one...

Phoenix, think before you post.

Wasn't that set up as a government program? He should be "slaming" the government that screwed it up.

A particular institution may be out of reach financially, "SAT-ically", geographically or in some other way of a particular person.

You just conceded my point -- that the best and brightest can be denied their choice of schools for financial reasons.

Phoenix, think before you post. -- #12 | Posted by daprof

Ahem.

I have to side with the libard Democrats on this one. Sigh...

As long as student loans are non-dischargeable in bankruptcy (no other loan has that severe penalty) and breach of student loans can result in massive penalties and legal fees that are also non-dischargeable, then the government should have tigher control over student loans. Non-dischargeable student loans should be about access to education and not profit. As long as the government is backing such loans with tax payer dollars, I think the government should take control over them.

If student loans were dischargeable and not taxpayer guaranteed , I would say the opposite that they should be purely private sector driven.

Barry's got all the answers, let the government give student loans from the pot of money they don't have.

It socialism. Pure and simple.

'The Obama plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans.'

Sickening.

#11 | Posted by zulu at 2009-09-21 07:20 PM | Reply

Wouldn't "socialism" include FREE college tuition?

'Wouldn't "socialism" include FREE college tuition?'

No. You don't understand socialism. And you apparently don't understand nothing is free.

It was government subsidized student loans that drove up the cost of college, but that is about to change. I think they are on the edge of massive cutbacks unless Obama throws more money at them. That's been his MO so far.

But it's "sickening", now I understand that, at least... Hope you have good health insurance.

I didn't read the article when I posted #19. I was right. This is right out of Marx's Communist Manifesto.

"The U.S. House of Representatives last week approved legislation that would cut major banks and student loan giant Sallie Mae out of a large slice of the $92 billion university student loan business, shifting most lending into a program run by the U.S. Education Department."

"I didn't read the article when I posted #19. I was right. This is right out of Marx's Communist Manifesto."

If Marx liked apple pie Ray would...

"Access to education shouldn't be limited by financial means"

Fascinating, this argument is used in the healthcare debate as well, both are faced with spiralling costs (greater than any nation on earth, as a percentage of GDP), with the government wanting an EVEN larger piece of the action to control costs.........

Access to education shouldn't be limited by financial means -- it's not at all the same thing as access to better stereo equipment, nicer cars, etc. Apart from equity considerations, it's not good for the country to keep the best and brightest down simply because they don't have money.

#7 | Posted by Phoenix at 2009-09-21 07:08 PM | Reply | Flag

The best and the brightest obtain scholarships, grants and such. The rest of us either go to work or borrow money to go to school and then go to work, or work and go to school at the same time. The key is not to borrow money for some degree you really don't want and that society has little call for, then you'll likely not only be able to repay it but you probably won't mind paying for what you made the commitment to buy in the first place.

Here is a question, is it possible that the influx of government dollars into these "industries" is what is causing the inflation?

#23 | Posted by AndreaMackris at 2009-09-21 09:29 PM

Absolutely.

Funny that the biggest whiners regarding these changes are the ones who have NEVER had to (and never will) worry about a college loan.....nor college in general.

So what you are trying to say is obama is just talking crap because he really controls the banks. Why in the hell is he begrudging them if he controls them?--Moneywar

Yes--Obama is talking crap to divide everyone and everything in our country.

He hates the banks and the insurance companies and everything in the corp du jour.

He has to keep up the crap because he gets to take over more crap.

I got loans and grants --paid back every dime. Cheap rates and took me 10 years.

And so the banks get a service fee--so what!

Freddie and Fannie pay service fees to banks to manage your home mortgage.

F&F are the investor and pay banks--Wells --BoA, Citi, you name it--they pay a small fee to keep track of the loan.

You are paying BoA--but it really goes to Fannie.

And they ensure the loan is paid timely, taxes are paid timely and if there is a problem the bank answers the questions--not F&F.

Everyone is missing Phoenix's point. Phoenix wants higher education to be free for everyone or to have government pick up the bill via tax payers.

DAPROF made excellent points. Live within your means or work extra hard for scholarships. Then work that much harder and save to provide your kids with a better opportunity.

It's time people stop living beyond their means and start taking responsibility for their lives and the lives of their families.

Social programs should be for the exception of American citizens who have fallen on hard times, not the expectation of the lazy

Maybe we should try to figure out why we pay more than any other country for public education and come in last in test scores.

re: Maybe we should try to figure out why we pay more than any other country for public education and come in last in test scores.

#29 | Posted by T_Man at 2009-09-22 12:53 AM | Reply | Flag:

...but we certainly shouldn't apply that logic to health care...

Murphy-
re: "He[Obama] hates the banks..."

Which is why he bailed them out?

???

...but we certainly shouldn't apply that logic to health care...

#30 | Posted by BetelG at 2009-09-22 12:55 AM

Is that supposed to be a witty comeback directed at me or just a general statement because I feel the same way about healthcare.

T Man-
I suppose your antipathy toward making it easier to train a future workforce with college degrees in order to compete globally pissed me off, not to put too fine a point on it.

"I just think they are approaching it like they did the stimilus and doing what is best to fill the pockets of those who got them in office instead of what is best for the American people. A good example would be the lack of Tort reform."

Posted by T_Man at 2009-09-10 01:31 AM |

That's just the funniest damned thing I've read in a good long while.

Murphy doesn't know shit and is out on the fringe of looney ville.

I work for a living and my taxes local as well as federal go to the university school system, I should have to pay 18000 a year for my daughter to go to the state university.

The posters on here who scribe to live within ones means just really isn't to rational as to reality in our education and future.

Power to the People! Tort Reform!!!!

Lofuckin'L

A good example would be the lack of Tort reform.

How moronic and dumb can a poster like this get, clearly doesn't understand anything of issues.

There's a lot of that going around.

So now B.O. is using the bailout money as a reason to tell these banks what to do. Why didn't the prick just nationalize them and be done with it? Another colossal clusterfuck by the federal government.

Can't wait to see what these idiots do next...

"Can't wait to see what these idiots do next...

Posted by Ari"

Did you know that there are TWO ways that our Constitution can be changed? And did you know that Pelosi, Reid and Barack Obama are using the less well-known way, without having to actually introduce amendments?

There is one other way that our Constitution can be changed... and it DOES NOT require all of those elected representatives to be in favor of it. It's called a Constitutional Convention, and all that it requires is 34 states to ask Congress to call one.

In fact, right now, all that is needed is for two more states to ask for a Constitutional Convention... and the basic law of the land could be changed forever by Barack Obama, Nancy Pelosi, and Harry Reid!

BetelG...

Wow.. pulling context from another topic and quoting me out of context on this topic. That's awesome! Way to go douchebag. Internet superman.

I bet that is your typical tactic, to attack people who post here who you object to.

Here is a short history of student loans.

The Health Education Assistance Act, 1963, which offered loans to medical and health program students.
The College Work-Study Program, 1964 (now called the Federal Work-Study Program). In this program, the federal government pays for most of students' earnings so, in effect it covers their educational expenses.
The Educational Opportunity Grant Program, 1965, which was created specifically for low-income students who couldn't afford college. No repayment was required.
The Guaranteed Student Loan (GSL) Program, 1965, which is also still in effect today. It's name was changed in 1988 to the Federal Stafford Loan Program. This program provided more money for student loans through banks or lending agencies, to offset rising education costs.
The Middle Assistance Act, 1978, provided student loans to middle-class families. This act, in effect, removed the income limit on federal aid programs.
The Parent Loans for Undergraduate Students Program, 1981, allowed upper-income families to get student loans, but at much higher interest rates.

Let's see, most were in 64 and 65. Who was president then? I can see why the little o is pissed. Them damn republicans struck again.

"Let's see, most were in 64 and 65. Who was president then?"

LBJ. What's your point?

You've also got Carter, Reagan, and a possible JFK in there.

Again, what's your point?

#14: Ohmygawd! I agree with Uta!

If the government subsidizes/protects a loan, they ought to have some control over how it is implemented, what penalties are assessed, etc.

Higher ed costs have risen disproportionately over the last 20 years--WAY over inflation and wage increases. Daprof is being disingenuous when he suggests that students should just go where they can afford (and I'm oversimplifying his point). It's not that simple. Even state colleges can cost more than a family can reasonably contribute. And scholarships don't cover everything, almost ever. I agree that people shouldn't live beyond their means, but I also think everyone who wants to go to college (and has shown that) should be able to go--which doesn't mean free or socialized, but does mean we need to look at prices and financial aid, INCLUDING loans.

Btw:

"The College Work-Study Program, 1964 (now called the Federal Work-Study Program). In this program, the federal government pays for most of students' earnings so, in effect it covers their educational expenses."

Bullshit. At least when I went to school. CWS provided money to help defray costs, not to cover educational expenses. Has something changed?

"The Educational Opportunity Grant Program, 1965, which was created specifically for low-income students who couldn't afford college. No repayment was required."

Still in effect? Damn, low income must be very low. I never heard of this, and it would have been nice.

"The Guaranteed Student Loan (GSL) Program, 1965, which is also still in effect today. It's name was changed in 1988 to the Federal Stafford Loan Program. This program provided more money for student loans through banks or lending agencies, to offset rising education costs."

Yep, at pretty high rates now. Well, from what I hear from those paying for it now. The rates for my undergrad loans were frozen at 8% for the life of the loan.

As for Daprof's community service... Well, I work in a high school, in a poor town. If I worked in the elementary school (the other side of the building), I would be eligible for loan forgiveness. But because I work in the high school, which accepts tuition students from other towns, I am not eligible. I'm not complaining, just pointing out that it's not so simple. I _chose_ my career path, and my earlier jobs. I wasn't in it for the money, and I chose an expensive private college that was the best fit for me in many ways. It's not as simple as some try to make it seem.

Again, what's your point?

#43 | Posted by Doc_Sarvis

For you that are too dull to see, The programs were started by dems. The little o is trying to do away with them and make them completly operated by the government.

How many private busisness does he have to rule before you libs see the pattern? I forgot, you may be in favor of the government taking over everything. After all, many of you are socalists.

In the great words of Judge Smalls from caddyshack: "The world needs ditch diggers too."

My wife decided to get an Art History degree from one of the countries most expensive art schools (SCAD). Now she makes like $15/hr and is crushed by about 120k in student loans of which quite a bit are higher interest private loans.

Really glad my name isnt attached to any of that, so it doesn't bug me too much.

Seems kinda crazy that couple years ago I had to play games to get financed on a Toyota Yaris ($12800 car) and I make decent money. YET someone like my wife, who with that degrees income potential is questionable at best, can get 100k+ in loans.... literally almost no questions asked.

In the end she signed the dotted line @ age 19, but its unlikely she'll ever pay off those debts before she dies at the rate shes currently paying and the fees/interest are stacking up.

Shes actually tried looking into the teaching to get out of some of the loans, but unfortunatly she'd have to get into even more debt to get a teaching certificate (about 14k more).

Catch 22.

"After all, many of you are socalists."

I'm a whole lot closer to socialist than Barack Obama will ever be. (And I'm avoiding a comment on "socalist.")

"Shes actually tried looking into the teaching to get out of some of the loans, but unfortunatly she'd have to get into even more debt to get a teaching certificate (about 14k more)."

True--the money--and I might add that teaching in order to gain loan forgiveness is a terrible reason to go into teaching. (I'm really not picking on Gimpster or his wife, just tangenting.) As are summers off and short hours. (For various reasons.) One should teach because it's what one _needs_ to do. (That's poorly worded on my part, but true.)

After all, many of you are socalists.
#46 | Posted by Sniper

Hey, Snoops, what's "socialism"?

Snoops, is the Military-Industrial Complex socialistic?

The Parent Loans for Undergraduate Students Program, 1981, allowed upper-income families to get student loans, but at much higher interest rates.

That damn bunch of republicans. Not giving low interest loans for all.

#52 | Posted by Sniper | Flag: One More Rightist Bozo Who Doesn't Know What Socialism Is

I guess the dicitonary doesn't know either.

socialism, general term for the political and economic theory that advocates a system of collective or government ownership and management of the means of production and distribution of goods. Because of the collective nature of socialism, it is to be contrasted to the doctrine of the sanctity of private property that characterizes capitalism capitalism, economic system based on private ownership of the means of production, in which personal profit can be acquired through investment of capital and employment of labor.
..... Click the link for more information. . Where capitalism stresses competition and profit, socialism calls for cooperation and social service.

Why don't you tell me your take on it dok.

So now B.O. is using the bailout money as a reason to tell these banks what to do. Why didn't the prick just nationalize them and be done with it? Another colossal clusterfuck by the federal government.

Can't wait to see what these idiots do next...

#39 | Posted by Ari at 2009-09-22 02:39 AM | Reply |

What? now your for government owned banks? Dude your like permanently stuck in the "take it up the ass" posistion hehe.

kni, if you are a productive wage earner, that is the position our government has forced us into. Bend over baby ad I'll show you where the wild goose goes. Both partys are doing it. The dems are running and the reps were just walking. They are both goin in the same direction.

Why don't you tell me your take on it dok.
#55 | Posted by Sniper

My take on it is that I'd kind of hoped you could come up with a definition that didn't come equipped with a note to "Click the link for more information." You get today's Eddie Award.

Bend over baby ad I'll show you where the wild goose goes.
#57 | Posted by Sniper | Flag: Classy

Student loans have gotten like the health care industry. Not so much about students (or health care). Mostly about an income opportunity.

It'll be amusing to watch kids up against a payment deadline have to deal with federal bureaucrats who don't give a damn. At least a bank has a motive to create a loan and get an asset on their books. But let a frustrated kid stand at the registrar's office, and he's just been told that the check got sent to the wrong place, and he's put on hold until his case officer in DC gets back from Gender Sensitivity training.

This is a good development. Usually someone has to graduate college, start a business, then have to get a permit or two to see for himself how dysfunctional government is. Now, the lesson begins at age seventeen and a half. Progress, that.