Bush Wants to Cut Student Loan Program
 

WASHINGTON - To get larger college grants to poor students, the Bush administration wants to shrink guaranteed aid to banks and end a popular loan program.

President Bush's budget will also propose raising federal loan limits for freshman and sophomore college students, Education Department officials told The Associated Press Friday.

The budget proposal will be released Monday.

Read the entire article here


~~~~~~~~~~~~~~~~~~~~

I know many people have/currently use student loans to pay for their higher education, so talk amongst yourselves.:cool:

That article sugar-coated Bush's plan.

Here we go: another article

Seems like the compassionate conservative is uniting college students to the unskilled labor market in a nation that is moving its unskilled labor jobs overseas...

can someone please explain this to me?
 

Maybe this depends on how the Perkins Loan works... but since "loans" have to be paid back, and grants do not, how would this save the country money? :confused:

Re: can someone please explain this to me?
 

http://www.ed.gov/prog_info/SFA/Stud...2/perkins.html

Perkins Loans are done through the school, but the government pays the interest on Perkins Loans while the student is in school. Also, once someone starts repaying loans, their interest rate is way lower than it is for most traditional loan programs.

So, I can see how giving out these loans--which are considered among the best to receive--could be a burden on the government.

thanks for the explanation.

i think it's really sad they are going to be phasing this stuff out b/c they help out so many students...esp. since tuition is going waaaaay up and many students already work tons of hours to afford school & things that go with it.

he wants to save money? maybe he shouldn't have wasted billions of $$ on a fake war.

Do you even realize how these loan programs work?

Do you even realize how commercial banks are using them to rip off the government and tax payers?

No you probably don't.

What does it have to do with a war? Nothing.

By the way, it's a real war and it is a war that the government of the United States took on including men like Kerry and Edwards.

-Rudey

actually i have a nice student loan, so i am pretty sure how mine works. :)

no student loans have nothing to do directly with the "war" .. but all they are talking about is "saving money".. just saying he could have saved a bunch :)

thanks & have a nice day.

No. It's OK that you didn't understand how student loans work, then called the Iraq war a "fake war" (how does that even make sense) and acted like "he" wasted billions when the government conducted it with the population supporting it.

-Rudey

i didn't know how the PERKINS loan worked. not that it's any of your business, but that's not the kind of loan i have.

read first please.

thank you.

and the thing about the war is MY OPINION. if you want to believe something else, more power to you, that's why we're called a "free country". :)

Listen you can't pass opinion off as fact. Is it also your opinion that pigs can fly? Really? Oh great. We all live in fairy tale land. And what does a "free country" have to do with anything?!?

And no you don't understand how the loans work. Most people that receive them don't. If you do, please tell me how different types of loans cost the government money and it's actually exploiting a loophole. But I'm sure since you know all about the loopholes you'd be willing to tell us what's going on.

Next time you think you're right, please, actually be right. I'm too old to be cutting people down for stupid things they say.

-Rudey

I think that college needs to be less accessible. Higher standards to get in and cost more money. Too many people are going to college. Many of the people going to college are unhappy and would probably do a lot better in a tech. school or trade skill.

I think that those that could meet stricter requirements would get a better education in the end. In a lot of my core classes, especially in business and pol.sci, I felt that they were dumbed down so everyone would have a better chance of passing. I don't think I went to econ, pol. sci., history, or anything like that more than 4 or 5 times a month and still pulled an A. It shouldn't be like that.

Oh great masterful one, please bequeath us with your vivid business knowledge as to how loans work. I will donate my first born's placental cord blood some that I can gain access to you extraordinary insights into this matter...

Praise be to al Rudeyester...

AKA_Monet

Maddam Monet,

If I get time I'll copy and paste an article. I can't seem to find the one I was looking for but this is talking about a problem with loans. What I was thinking of addressed something else so I'll post it when I come across it.

They're essentially a cash cow for large commercial banks that are abusing a loophole. I'm not sure if they're trying to close this loophole or not but people can't just use black and white paint to create a picture of good and bad with these things. Nobody from any party out there just wants to keep kids from getting loans.

Student Loan Swindle

http://www.washingtonpost.com/wp-dyn...2004Sep28.html

By Anne Applebaum
Wednesday, September 29, 2004; Page A27



To most of us, the phrase "student loans" does not conjure an image of wealth or riches. Most of us think a student loan is something that enables someone to live on canned soup and crackers for four years while holding down a hamburger-flipping job and pulling all-nighters in the library. A student loan is for students, and most students aren't rich.


To some people, however, a student loan isn't a burden. It's a get-rich-quick scheme. If that sounds surprising, ponder this: Thanks to loopholes in the student loan system, financial institutions that lend to students will earn an unprecedented $1 billion over the next year. None of that money will go to students. All of it will go to the lenders, and all of it will come from you, the American taxpayer. It would be a scandal -- if, that is, anybody were upset about it.


Technically, it is just about possible to explain how this state of affairs came about. About 18 months ago, a few lenders found what they thought might be a loophole in a 1993 law that was supposed to phase out a particular kind of student loan, one that guaranteed loan providers an interest rate of 9.5 percent, much too high in an era of 3.5 percent interest rates. By mixing and matching loans, the banks thought they could make the amount of money earning 9.5 percent grow instead of shrink. Tentatively, they started sending invoices to the Department of Education. The Department of Education paid them. So they started sending more. And more.


Once you've mastered the technical explanation, however, the deeper, more philosophical explanations are much harder to grasp. Why, for example, isn't anyone in the Department of Education especially bothered by the waste of $1 billion? When queried, department officials say they thought the loopholes were legal, they thought Congress was going to deal with the problem, and they thought that it would take more than two years to change the regulations if they did it on their own. Never mind that a recent Government Accountability Office report concluded that the whole thing could have been dealt with in a simple letter, or that a former general counsel for the department has said that the department's claim of powerlessness is "without legal foundation." I asked a Department of Education official -- Sally L. Stroup, the assistant secretary for postsecondary education -- whether she didn't think a billion dollars, in the context of education, was a lot of money. "We have a $50 billion student loan program," she replied.


But if administration officials aren't bothered, shouldn't Congress care? Call up Capitol Hill, however, and everyone is profoundly uninterested. Yes, they tell you, Congress did know about the problem -- has known about it for ages, thank you very much -- and, yes, the president's budget calls for closing the loophole and, yes, Congress was going to fix it in a bigger education bill. The spokesman for the House Committee on Education and the Workforce wrote to me, annoyed: "It is a bit exasperating that after spending most of 2004 fighting to pass a bill that would permanently eliminate the 9.5% guarantee, my boss and other Republicans now suddenly stand accused of keeping it intact."


But the bigger bill isn't going to pass this year, and in the meantime, I reckon the cost of providing free money to banks runs at about $2,739,726 every day. A one-page amendment, or a short, crisp bill, would have put an end to the whole thing. But although some in Congress are willing to do precisely that, the Senate has just refused. Among other things, it seems some senators wanted to kill the loophole in a larger bill, so that the savings count as "credit," so that the same amount of money could be spent elsewhere without anyone complaining. If that sounds overly complicated, that's because it is.


I could find deeper conspiracies here, of course. I could note, for example, that the student loan industry has contributed about $750,000 to the 49 Republican and Democratic members of the House education committee in the past 18 months. But the more I know about this story, the more I think it's explained not by a conspiracy but by a mentality. Just as it's naive to think that "student loans" means "helping students," so too is it naive to think that a billion dollars of federal education money means new libraries and lots of books. A billion dollars in Washington -- what's a billion dollars in Washington? Washington has a different perspective. After all, we in Washington spend a lot of time talking about the $2.4 trillion budget and the $3 trillion that will be spent on Medicare over the next 10 years. A billion dollars is petty cash here; a billion dollars is a rounding error in the budget calculations. Only hicks and neophytes worry about a billion dollars, and anyway this is an election year and nobody wants to talk about such dull matters as student loan legislation, when they could be out crusading against big government or the budget deficit. Ten years ago this week, the then-new Republican Congress signed the "Contract With America," vowing, among other things, to do away with "waste, fraud and abuse." It's reassuring, at the very least, to know that some campaign slogans will never go away.

-Rudey

Oh... I don't know the fact that one it violated the principle of pre-emptive war that the US signed on to.. or that it was declared illegal by the UN... or that the premise of WMD was pretty much a fabrication to justify war... or that Bush VIOLATED US AND INTERNATIONAL LAW! WTF is the deal with people in the US not realizeing that they were lied to, duped, and had their laws and rights violated by that jackass Bush?!?!?

Listen don't talk about law and what is illegal when you spend your time threatening to kill them and gut people.

Also, read and stop throwing in BS that has nothing to do with what was discussed. Someone called it a fake war. Do you know what the word fake means?

Thanks and I'm sure you will enjoy being in a Canadian jail some day for being a violent thug who cares alllllll about international law.

-Rudey

If you can't hold us accountable for it then we didn't violate shit.

Thats the whole point of being a nation-state and having a military :)

As far as being lied to etc . .. . well most people know it, but it dosn't much affect the average citizen . . . . so who cares? Its mostly just a bunch of dead foreigners.

So what makes your OPINION right?

Nothing :)

How would you know what I do and do not know? There's no way you can possibly know that.

Next time you think your opinion is superior, please step back from the keyboard, because you're too old to make yourself look like an ass.

This is one, out of many, examples of why I so dislike the Bush Administration...

They'll tout this around, saying that they helped numerous students get to college who otherwise couldn't by upping the amount given out in grants. Great, I'm all for that, I'm definitely in support of increasing the amount of grants available.

But in order to do this they cut loans, leaving a significant number of students unable to pay for college or graduate school. Obviously a bad thing. And so much for helping middle class Americans deal with the rising costs of tuition...this just doesn't make sense.

I don't think that simply switching around who gets the money helps the collective at all. It's seriously just a one in/one out type of deal.

I wish I could somehow condense this and put it on a t-shirt. I love it! :)

Oh, well. I guess I'll just have to settle for my "My Bush Would Make A Better President" shirt.

Actually, what opinion did I have? There is a difference between fact and opinion, but you're too ignorant to know what it is.

-Rudey
--Now go watch those flying pigs

Again, the loan business is not some great good in this country. At least read into the problems of the different types of student loans out there before you go out saying "this just doesn't make sense."

-Rudey

It was my opinion that Bush could have saved a couple billion by not taking us to war... since saving money was the basis for his loan cutting, that's the only reason I posted that.

It's pretty apparent you're not agreeing here, which is fine, but you don't have to "cut anyone down" because you don't agree. I never once said my OPINION was the "right" one. I never said my opinion was a fact. All I said was that it was my opinion.

Like I said before, please read first. Thanks.

This is simply a narrow viewpoint. Increasing grants does exactly what the student loan program was intended to do - allow the underprivileged the opportunity to attend college at a reduced cost - and it does this better than loans. Up to this point, loan programs have been fleecing the government, all the while allowing people to write off the interest.

Also - it's not like loans will suddenly disappear. Many, many competitive loan programs can be found through private banking, and maybe eliminating the government fat from these programs will lead to positive competition. It's certainly worth exploring, considering the extreme waste in these programs currently.

Using this logic, it also doesn't hurt the collective, no? And if the net result is increased efficiency, then you've helped the collective indirectly.

Let's not even stray into the 'how many people actually need loan programs, and would benefit from paying directly?' argument . . .

Again, it was not Bush's decision alone to go to war.

Again, this is not a "fake" war.

Again, these loan programs are flawed and aren't simply about spending on something.

It's pretty apparent you are passing off opinion as fact and if you want to save face, I would keep quiet now.

-Rudey

look, those are my opinions. i am not trying to pass anything off as fact.. i'm just saying that's how i THINK they are.

i never said loan programs are super great and perfect in every way.

and everyone has their OWN OPINION on the war.. that just happens to be mine.

if i have to CAPS all the opinionated words I will.

Right and some people have an opinion that pigs can fly. It's OK. We get it.

-Rudey

I'll admit, my first reflex wasn't positive, as it was largely because of student loans that I was able to afford college.

Honestly though, after reading the article and reading Rudey's post, it doesn't seem like we're talking about the end of the world here as far as help for college. It would be great to have more grants and more alternatives when looking for ways to pay for school.

If these loan companies are just taking advantage of the situation, why not search for alternatives. As was said, it's not like the government is going to leave all of these students and prospective students with no way to go to college.

Although I agree with most of your post and thanks Rudey for an explanation of what is going on, I don't know you guys...

Something's fishy...

The big corporate banking clan is fleecing Academia that is meant to help many a student to enter a college somewhere, somehow...

But, I see percentages of young people with bad credit and huge credit debt after undergraduate college that only a DiTech loan may be able to squeeze them out of 10 years from now with a higher percentage rate and some kid's first born...

I know there are NUMEROUS WAYS to finance college... But you as well as I know that most young people don't have the fiscal intelligence of a mortgage actuarial scientist to work out how this financing will occur... Otherwise, why do chickadees strip at the local strip club for college? I know, that's bogus, but hey, that's what kids think they have to do for the name of "free education"... Or at least an education to enable them to pursue a higher paying job... If that...

I myself was fortunate not to have to take out ANY loans... They ALL seems fishy to me... Yeah, I had credit card debt that was in the thousands with a poor interest rate, but there was no defaulting on minimum payments and the thought of renegotiating never was taught to me...

Later in life, I have found some more loophole for financing... But, that in and of itself is risky...

Also, Rudey, you post is still a "columnist" in the Washington Post... That makes it an opinion... How well will facts be checked with her assertions?

But I do agree with you, the Dept. of Ed. does need to be fiscally overhauled... But that would just kill No Child Left Behind and Headstart programs...

Do a search on the internet for it Monet if you don't believe me. It is an op-ed written about how loan providers are fleecing the government, which is a fact.

This has been known for a long time.

I'm not saying that anyone is doing this solely to clean up the student loan business.

But I am saying that you can't just say there is good here and bad there with this issue. I don't think anyone just wakes up and says "I want to screw over some kids and make sure they get no loans for school."

Greed is the best known thing about our world. You can depend on it so much that our government set up a system of checks and balances. These banks will not only line the pockets of politicians but also push their message in the media. I'm sure you know how they operate in big pharma; this is similar.

-Rudey

As much as I dislike it as a newspaper, there was a pretty good article about the student loan industry in the Village Voice.

I'd rather have student loan debt than credit card debt, but maybe that's just me...

I learned a long time ago that there is a lot of money to be made from government programs set up to help people in need so this does not surprise me.