House Votes for Govt Takeover of Student Loan Funding

[Suspect Chin]

(http://online.wsj.com/article/BT-CO-20090917-715193.html%5B/URL)The house voted today to allow the US government to become the sole student loan lender.

http://online.wsj.com/article/BT-CO-20090917-715193.html

I guess competition is good when it comes to health care but not when it comes to lending.

What will the government take over next?

[The Jays]

Well, when private student lending rates rape college graduates with ridiculous APR, combined with the rising cost of attendance...

[earthbrown]

I love when people have $60k in student loans, for a $40k a year job.



K

[benjamin]

Well, when private student lending rates rape college graduates with ridiculous APR, combined with the rising cost of attendance...
Exactly.



I love when people have $60k in student loans, for a $40k a year job.

not easy to find a 40k job.

[Suspect Chin]

Well, when private student lending rates rape college graduates with ridiculous APR, combined with the rising cost of attendance...

Not really. When I consolidated my loans with SallieMae back in 2006 I got a fixed APR for less than 5% on all of them.

[Suspect Chin]

not easy to find a 40k job.

How about all the employees of SallieMae et al. who will lose their jobs?

[TheMojoPin]

Good.

[Suspect Chin]

Good.

Well said and completely unexpected.

[TheMojoPin]

Really don't give a shit what you were expecting. WHUT-WHUT-WHUT.

[Suspect Chin]

Really don't give a shit what you were expecting.

Uh oh he's pissed. Don't you have some stats you can contribute?

[TheMojoPin]

Nope, no need. It's already done. HAW-HAW!

[foodcourtdruide]

Spankfully yours, mojo

[HBox]

Uh oh he's pissed. Don't you have some stats you can contribute?

71+34-15=90.

[foodcourtdruide]

71+34-15=90.

I have bingo.

[TheMojoPin]

Spankfully yours, mojo

Indeed. And it was "TMP," not "Mojo." No time for the full thing, what with all the spanking and all.

[HBox]

I have bingo.

YAHTZEE!

[Suspect Chin]

Well this is a productive discussion we've had here gentlemen.

[Suspect Chin]

Indeed. And it was "TMP," not "Mojo." No time for the full thing, what with all the spanking and all.

I'm impressed with how quickly you dispatched your peons.

[TheMojoPin]

I have peons?

WHY DIDN'T ANYONE TELL ME?!?

[foodcourtdruide]

Indeed. And it was "TMP," not "Mojo." No time for the full thing, what with all the spanking and all.

I am going to guess your age. I say... 31.

[HBox]

Well this is a productive discussion we've had here gentlemen.

Serious question: Did you actually read the article? If so, please explain to me the role private lenders played.

Non-serious comment: Shitty snot McPoopy Spank Cranky Penis.

[TheMojoPin]

Very close, FCD.

[foodcourtdruide]

I have peons?

WHY DIDN'T ANYONE TELL ME?!?

Doesn't a peon sound delicious? It sounds like a good soup.

[HBox]

Doesn't a peon sound delicious? It sounds like a good soup.

Split peon soup sounds delicious.

[foodcourtdruide]

Well this is a productive discussion we've had here gentlemen.

Sorry. Me and hbox are mojo's peons. By that I mean we'd blow him.

[epo]

So the government made education more affordable while we strive to raise the level of our human capital in this global economy. How is this a problem?

[TheMojoPin]

Sorry. Me and hbox are mojo's peons. By that I mean we'd blow him.

I always thought I was Hbox's peon.

[Suspect Chin]

Serious question: Did you actually read the article? If so, please explain to me the role private lenders played.

Non-serious comment: Shitty snot McPoopy Spank Cranky Penis.

Keep the size of government down. Maintain a free market system that includes competition from the private sector. Provide jobs to the banking industry--an estimated 35,000 jobs will be lost with this bill. Less government/tax money tied up in loans.

It is another frightening move by the Obama Administration and House to distribute financial burden and risk to the American people. Granted, it is supposed to save $87 Billion over ten years in administration costs but all of the risk that was previously burdened by knowledgeable investors is now being shouldered by taxpayers. Who is going to cover for these loans when people default? We are.

[Suspect Chin]

So the government made education more affordable while we strive to raise the level of our human capital in this global economy. How is this a problem?

It absorbed an enormous entity into a body that already runs grossly inefficiently. We have to stop believing that the government can solve everything.

[Suspect Chin]

Nope, no need. It's already done. HAW-HAW!

Oh and it hasn't passed entirely yet. It will face stiff opposition in the Senate.

[TheMojoPin]

It absorbed an enormous entity into a body that already runs grossly inefficiently. We have to stop believing that the government can solve everything.

Federal student loans don't currently run pretty smoothly?

[TheMojoPin]

Oh and it hasn't passed entirely yet. It will face stiff opposition in the Senate.

It will pass and it will be glorious. It's only a pity that it took this long to step up and stop the ass-raping of the people in this country that can barely go to college in the first place. Higher education is something that too many people have given up on because they didn't want to deal with the private loan companies.

[Suspect Chin]

It will pass and it will be glorious.

We'll see. If it does, you and HBox and FCD can all get together and peon each others' butts.

It's only a pity that it took this long to step up and stop the ass-raping of the people in this country that can barely go to college in the first place. Higher education is something that too many people have given up on because they didn't want to deal with the private loan companies.

Why would they be dealing with the private loan companies? If the existing government direct-loan program can't help them, the expanded program won't be able to either. I would think that if the government can't help them, obviously the private loan company wouldn't be able to either.

[spoon]

Well, when private student lending rates rape college graduates with ridiculous APR, combined with the rising cost of attendance...

I agree on this move and this post.

I am spoon and I approve of this message.

[spoon]

I love when people have $60k in student loans, for a $40k a year job.



K

Well, let's just do a little extrapolation on those numbers shall we. Nah, you get the point.

[spoon]

71+34-15=90.

What is the number of posters here who actually aren't Gvac?

[The Jays]

Keep the size of government down. Maintain a free market system that includes competition from the private sector. Provide jobs to the banking industry--an estimated 35,000 jobs will be lost with this bill. Less government/tax money tied up in loans.

It is another frightening move by the Obama Administration and House to distribute financial burden and risk to the American people. Granted, it is supposed to save $87 Billion over ten years in administration costs but all of the risk that was previously burdened by knowledgeable investors is now being shouldered by taxpayers. Who is going to cover for these loans when people default? We are.

Private loan issuers have been reducing the loans giving out to students for years now, because they weren't seeing enough of a profit in it. So, because business can't make a profit, kids shouldn't go to college? And do you honestly believe that the majority of people who go to college as a result of this are going to default on their loans? Not only do you have a slavish belief in the banking industry, you also think the people that would benefit from these loans are just deadbeats waiting to happen. What strong faith you have in the American people.

[Suspect Chin]

Private loan issuers have been reducing the loans giving out to students for years now, because they weren't seeing enough of a profit in it. So, because business can't make a profit, kids shouldn't go to college? And do you honestly believe that the majority of people who go to college as a result of this are going to default on their loans? Not only do you have a slavish belief in the banking industry, you also think the people that would benefit from these loans are just deadbeats waiting to happen. What strong faith you have in the American people.

No I don't think the majority of the people are going to default, but some certainly will and taxpayers will get stuck with the bill. You are putting words in my mouth to demonize my viewpoint. I believe that the risk (and possible reward) should lie on the shoulders of private investors, not the American people.

[spoon]

No I don't think the majority of the people are going to default, but some certainly will and taxpayers will get stuck with the bill. You are putting words in my mouth to demonize my viewpoint. I believe that the risk (and possible reward) should lie on the shoulders of private investors, not the American people.

Whereas I actually like the fact that some business will be taken OUT of the educational system for people to worry about education from generation to generation, and not just for the wealthy. The profit margins weren't great, but they do turn a profit so it's a moot point. I like the action and hope it gets all the way through.

[Suspect Chin]

Whereas I actually like the fact that some business will be taken OUT of the educational system for people to worry about education from generation to generation, and not just for the wealthy. The profit margins weren't great, but they do turn a profit so it's a moot point. I like the action and hope it gets all the way through.

There will be some additional money for grants, true, but the argument isn't really who can or cannot afford an education or get funding. The government already controls most of the higher education lending as it is, so if you were unable to get funding before this bill, you will likely be unable to get funding after this bill.

And let's face it, we all come out of college broke anyway, so if the playing field wasn't level before college, it certainly is afterward. We all come out strapped with student loans and compete for the same jobs. If your rich dad paid for your college, then you were pretty guaranteed a silver spoon anyway, so those people aren't part of the argument.

The problem is that the government is taking over another enormous financial entity and completely shutting out any competition from the private sector (it is almost the exact opposite of what they are doing with heath care--different issue I know).

[Syd]

Education is a part of America's financial security, physical security and scientific future. It's more vital to the people than defense -- why would we want anyone but ourselves to provide loans for education of our society?

Furthermore, as far as defaults go -- the interest rates on the loans goes towards operating costs, including foreseen defaults. Apart from necessary seed money which is provided in the form of a loan, no tax money is used.

[EliSnow]

Well, let's just do a little extrapolation on those numbers shall we. Nah, you get the point.

I'm guessing earthbrown has not student loans because he couldn't get into college.

By his rationale, because I had a $150k in college and law school loans, I shouldn't have taken that $100k/year job for a huge law firm when I got out of law school.

[angrymissy]

No I don't think the majority of the people are going to default, but some certainly will and taxpayers will get stuck with the bill. You are putting words in my mouth to demonize my viewpoint. I believe that the risk (and possible reward) should lie on the shoulders of private investors, not the American people.

Student loans are like, the one thing that you can't default on. You can't even get rid of them in a bankruptcy. I think the only way to get rid of them is to become 100% disabled with no money or assets.

[Freitag]

I'm guessing earthbrown has not student loans because he couldn't get into college.

By his rationale, because I had a $150k in college and law school loans, I shouldn't have taken that $100k/year job for a huge law firm when I got out of law school.

WELL HELLO MR. FANCY PANTS.

[EliSnow]

WELL HELLO MR. FANCY PANTS.

It's Mr. Fancy Pants, Esq., damnit!

[Freitag]

It's Mr. Fancy Pants, Esq., damnit!

You're Esquire of two things right now, and Jack just left town.

[Freitag]

And let's face it, we all come out of college broke anyway, so if the playing field wasn't level before college, it certainly is afterward. We all come out strapped with student loans and compete for the same jobs. If your rich dad paid for your college, then you were pretty guaranteed a silver spoon anyway, so those people aren't part of the argument.



Not really. I went to community college for a majority of my first 2 years of credits. I did very well there, so I was offered partial scholarships at other schools to get my degree... so I was way below the average, even though the school I went to was one of the more expensive schools in Jersey.

Community college gets a REALLY bad rap. The radio/communication facilities at the Community college I went to were waaaaaay better than the college I graduated from at the time I was attending. Teenages put this stigma on community college, when, to be honest, it can really help with the maturity process and getting the most out of your education.

I kinda hope that the recession makes the next wave of parents more financially responsible for saving for college. Although the rule of thumb is, "you can borrow for college, you can't borrow for retirement."

[A.J.]

Claiborne Pell must be rolling over in his grave.

[KatPw]

Not really. I went to community college for a majority of my first 2 years of credits. I did very well there, so I was offered partial scholarships at other schools to get my degree... so I was way below the average, even though the school I went to was one of the more expensive schools in Jersey.

Community college gets a REALLY bad rap. The radio/communication facilities at the Community college I went to were waaaaaay better than the college I graduated from at the time I was attending. Teenages put this stigma on community college, when, to be honest, it can really help with the maturity process and getting the most out of your education.

I kinda hope that the recession makes the next wave of parents more financially responsible for saving for college. Although the rule of thumb is, "you can borrow for college, you can't borrow for retirement."
You are so right about community colleges getting a bad rap. The CC I went to is one of the best in the nation. The professors I had there were also adjunct professors at Hofstra, NYU, Columbia, etc. Harvard has a scholarship set up specifically for students at my former Alma Mater. I think teenagers put a stigma on it simply because they want to go away to school, regardless if they are ready for it or not.
You put the work in and you will have a top notch education. This applies to all colleges and Universities.

And for those talking about student loan reform here is a great article from a recent RS regarding the matter.
http://www.rollingstone.com/news/story/29872191/obamas_real_reform

If you don't think the taxpayers are already bearing the brunt of the risks involved in student loans:
Since 1965, government has helped students finance college through the Federal Family Education Loan program. The system essentially operates as a lucrative form of corporate welfare, offering a guaranteed rate of return for banks and other middlemen who provide capital for student loans. The government not only makes all the decisions — who is eligible for loans, for what amount and at what rate — but it protects private lenders from virtually any risk: When college students are unable to repay their debts, taxpayers are required by law to reimburse the banks for 97 percent of the losses. "The government is doing all the work and taking all the risk," says Education Secretary Arne Duncan.
Typical privatize the assets, publicize the losses scheme.

[Dude!]

free everything for everyone!

[KatPw]

free everything for everyone!

No one is proposing that, and certainly not for the tertiary education sector.

[TheMojoPin]

Claiborne Pell must be rolling over in his grave.

The Pell Grant and I recently had a torrid love affair. It was glorious.

[Furtherman]

Well, when private student lending rates rape college graduates with ridiculous APR, combined with the rising cost of attendance...

Damn right. I took me a while, but I paid mine off... I had one hell of a party after I wrote that last check.

I'm guessing earthbrown has not student loans because he couldn't get into college.

I could only imagine the application essay.

[EliSnow]

Damn right. I took me a while, but I paid mine off... I had one hell of a party after I wrote that last check.


I think that party will happen when I turn 56, though I did pay off my non-federal loans where the interest rate was above 8%.

[KatPw]

I think that party will happen when I turn 56, though I did pay off my non-federal loans where the interest rate was above 8%.

Holy crap! I'm fortunate. I had student loans from the first college I went to, but I worked part-time (full-time summers) and was able to pay them off shortly after leaving that college. My other two degrees were paid for out of pocket. My former loan company was not happy with the fact that I paid off my loans so fast :lol: they were actually trying to prevent me from paying them more money than was dictated each month.

[spoon]

WELL HELLO MR. FANCY PANTS.

Army of Darkness fans everywhere hate you for murdering that line!

[spoon]

Paid for my college myself (mostly loans at around 10%). Wrapped them up in less than 5 years too but I hate debt outside of housing.

[Suspect Chin]

I'm guessing earthbrown has not student loans because he couldn't get into college.

By his rationale, because I had a $150k in college and law school loans, I shouldn't have taken that $100k/year job for a huge law firm when I got out of law school.

What does that even mean? Or did you just want us to know you make a lot of money?

[KatPw]

What does that even mean? Or did you just want us to know you make a lot of money?

I think it means that you cannot expect to come out of school and pay off you student loans in very short time frame. Earthbrown had commented I love when people have $60k in student loans, for a $40k a year job. How much in loans do you think people should have when they leave school for a $40,000 a year job?

[Suspect Chin]

How much in loans do you think people should have when they leave school for a $40,000 a year job?

Isn't that a personal decision? You could go to Community College and get a 40K a year job when you graduate and have no loans, or you could go to Harvard and get the same job and have 150K in loans. The post graduation salary needs to be considered when someone decides which college to attend.

[EliSnow]

The post graduation salary needs to be considered when someone decides which college to attend.

What? A lot of kids don't know what they are going to do after college.

Your loans need to be taken into account before you accept your first job, and how hard you take school.

[Suspect Chin]

What? A lot of kids don't know what they are going to do after college.

Your loans need to be taken into account before you accept your first job, and how hard you take school.

I agree but my opinion is that unless you know you are going to major in something that will provide you with a salary sufficient to pay off massive student loans, you shouldn't go to the school where you need to borrow massive amounts of money. Do basic personal economic principles not apply here?

[EliSnow]

I agree but my opinion is that unless you know you are going to major in something that will provide you with a salary sufficient to pay off massive student loans, you shouldn't go to the school where you need to borrow massive amounts of money. Do basic personal economic principles not apply here?

A major in a liberal arts school like Harvard isn't something that limits what you are going to do afterwards. I've known lawyers with history, English, poetry, philosophy and other similar majors. I myself was a history major.

I can say that if you went to Harvard and had that type of loan size, your choices of jobs would be different.

[EliSnow]

I think it means that you cannot expect to come out of school and pay off you student loans in very short time frame. Earthbrown had commented How much in loans do you think people should have when they leave school for a $40,000 a year job?

This is the point. It's putting the loan size (which was huge) in line with the salary, which was a good one.

I used my example because I don't think anyone should say that I shouldn't have taken the $100k given the size of it. I was also pointing out that a large student loan is usually considered an investment in what you do afterwards. And you don't pay off the investment in one year's salary.

[Suspect Chin]

A major in a liberal arts school like Harvard isn't something that limits what you are going to do afterwards. I've known lawyers with history, English, poetry, philosophy and other similar majors. I myself was a history major.

I can say that if you went to Harvard and had that type of loan size, your choices of jobs would be different.

Right but you probably had the plan in mind of going to law school after undergrad, hence an education that can pay itself off.

My point is that education is an investment. If you decide to take a big buy in (Harvard in this example) you have to be prepared to do what it takes on the back end to make that investment pay off.

[Suspect Chin]

This is the point. It's putting the loan size (which was huge) in line with the salary, which was a good one.

I used my example because I don't think anyone should say that I shouldn't have taken the $100k given the size of it. I was also pointing out that a large student loan is usually considered an investment in what you do afterwards. And you don't pay off the investment in one year's salary.

Well said.

[EliSnow]

Right but you probably had the plan in mind of going to law school after undergrad, hence an education that can pay itself off.

Nope. I didn't know what I was going to do. But I knew that whatever the choice was, I was going to be able to support myself afterwards, given my education, etc.

My point is that education is an investment. If you decide to take a big buy in (Harvard in this example) you have to be prepared to do what it takes on the back end to make that investment pay off.

Which is my point. You may not know what you are going to do before you go to Harvard or Yale or other similar schools, but if you're taking out a huge loan, that will affect the type of job you seek afterwards.

[EliSnow]

Well said.

And I understand what you're saying. If you know you want to be an elementary school teacher prior to college and you don't have the money to go to Harvard, you don't go there.

[keithy_19]

Not really. I went to community college for a majority of my first 2 years of credits. I did very well there, so I was offered partial scholarships at other schools to get my degree... so I was way below the average, even though the school I went to was one of the more expensive schools in Jersey.


If you maintain a B average at the community college I attend they'll pay for you tuition there. Not a bad deal. And you can get the same education you would get at a 4 year university for much, much cheaper.

[Drunky McBetidont]

junior colleges are for "special" students to get their feet wet. so cute.

[keithy_19]

And I understand what you're saying. If you know you want to be an elementary school teacher prior to college and you don't have the money to go to Harvard, you don't go there.

I wanted to apply to Harvard, knowing full well that I wouldn't get in and that if I did by some miracle get in I wouldn't be able to pay for it. The idea of getting a rejection from Harvard tickled me though. Alas, it was too much money to waste just to get a paper saying they don't want me.

[keithy_19]

junior colleges are for "special" students to get their feet wet. so cute.

Interesting enough, a professor at county was also a professor at Princeton. Weird...

[EliSnow]

I wanted to apply to Harvard, knowing full well that I wouldn't get in and that if I did by some miracle get in I wouldn't be able to pay for it. The idea of getting a rejection from Harvard tickled me though. Alas, it was too much money to waste just to get a paper saying they don't want me.

I will admit that Harvard rejected my application. I paid them back later in my freshman football game though.

[Dude!]

I wanted to apply to Harvard, knowing full well that I wouldn't get in and that if I did by some miracle get in I wouldn't be able to pay for it. The idea of getting a rejection from Harvard tickled me though. Alas, it was too much money to waste just to get a paper saying they don't want me.

money is not a reason
not to apply to Harvard

if you get in
they have a policy of making sure
EVERY student gets all the
financial aid they need to pay for it
really rich people get no financial help
middle class get lots of help
poor folks get complete help

so, go ahead and apply
and get that rejection
you want

[EliSnow]

money is not a reason
not to apply to Harvard

if you get in
they have a policy of making sure
EVERY student gets all the
financial aid they need to pay for it
really rich people get no financial help
middle class get lots of help
poor folks get complete help

so, go ahead and apply
and get that rejection
you want

I can agree with this fact. I owed $20k coming out of Yale, and my folks paid less than that while I was there.

[Suspect Chin]

I can agree with this fact. I owed $20k coming out of Yale, and my folks paid less than that while I was there.

Columbia switched over to 100% assistance the year after I graduated.

[Tenbatsuzen]

If you maintain a B average at the community college I attend they'll pay for you tuition there. Not a bad deal. And you can get the same education you would get at a 4 year university for much, much cheaper.

I believe the STARS program is for public, state schools, not the private school I graduated from.

[A.J.]

I can agree with this fact. I owed $20k coming out of Yale, and my folks paid less than that while I was there.

Columbia switched over to 100% assistance the year after I graduated.

I feel stupider reading posts like these.

OH GOD -- IT BEGINS!

[booster11373]

Repeal public education and close all the schools!!!! Education should be a privilege only afforded by the wealthy!!!!!!!!!!!!!

[Suspect Chin]

I feel stupider reading posts like these.

OH GOD -- IT BEGINS!

I meant Columbia Community Culinary & Cuticle College.

I do nails and make dessert.

[IMSlacker]

I feel stupider reading posts like these.

OH GOD -- IT BEGINS!

I went to Memphis State and put my tuition on my credit card each semester then tried to pay it off before the next semester started. Usually, I was successful. I hope this makes you fee better.

[A.J.]

I went to Memphis State

When it was still Memphis State?

[IMSlacker]

When it was still Memphis State?

Yep. I think they changed the name the year after I graduated.

[WRESTLINGFAN]

This will lead to unintended consequences, Basically it will become another Fannie Mae/Freddie Mac