that's worse than both the President's and Senator Warren's proposals.

This is an INVESTMENT.

That is why congress is debating interest rates. Can't blame the banks any more.

Last edited Thu Jul 18, 2013, 01:58 PM - Edit history (1)

directly? That's good to know. However, are you sure they aren't going to become contractors for this considering how we privatize everything today?

ALEXANDRIA, Va. — President Obama signed legislation on Tuesday to expand college access for millions of young Americans by revamping the federal student loan program in what he called “one of the most significant investments in higher education since the G.I. Bill.”

Mr. Obama went to a community college where the wife of his vice president teaches to draw attention to the student loan overhaul attached to the final piece of health care legislation that passed last week. In signing the bill, Mr. Obama put the final touches on his health care program but used the occasion to highlight the education provisions.

“That’s two major victories in one week,” he told students and guests at the Alexandria campus of Northern Virginia Community College, where Jill Biden teaches English. While he praised the health care overhaul, the president said, “what’s gotten overlooked amid all the hoopla, all the drama of last week, is what’s happened with education.”

The new law will eliminate fees paid to private banks to act as intermediaries in providing loans to college students and use much of the nearly $68 billion in savings over 11 years to expand Pell grants and make it easier for students to repay outstanding loans after graduating. The law also invests $2 billion in community colleges over the next four years to provide education and career training programs to workers eligible for trade adjustment aid after dislocation in their industries.

http://www.nytimes.com/2010/03/31/us/politics/31obama.html?_r=0

countries do. The student loan problem would be gone then.

But the greed mentality of this nation is out of control. The 1% don't invest for future generations they invest to make themselves richer NOW.. They want it ALL and they want it NOW..

I have been to Scandinavia 3 times in the last 3 years. Every visit I see more construction, more cranes, more building..

On one trip I was with a conservative guy, nice guy, just a little wacky in his ideas, and even he looked around and actually said to me "this socialism thing really works for these people doesn't it".

Americans need to get away from the red menace hatred we were taught and propagandized with during the cold war and start seriously looking at socialism as one of the tools to make our country work again. The problem with socialism under the Soviets, the Chinese and North Korea is that it's married to totalitarianism. That's when it doesn't work. Capitalism doesn't work either once it becomes laissez faire capitalism and crosses the line of funneling all resources and assets up to the 1% as we have done in our country today. We really need a good dose of socialism as well as regulation of industry to get back on track.

a government that actually works for both the people and the corporations.. There is a balance to be had, and we could learn a thing or two from some of our European counterparts...

But you can't say that in America. God forbid you say someone is doing something better than we are. God forbid we believe that we could learn from others, then we would have to admit we aren't "the worlds greatest nation".

...what a bunch of corrupt, shortsighted, and did I mention CORRUPT?...assholes!

Good idea, all you senate scumbags!

Fuck over the only hope we have for a "future" - the future in their fields of study which will never be, for many student loan debtors/victims of trade school fraud, because many will default on their payments and be hounded for outrageous interest and penalties for the rest of their lives.

BTW, "senators," where are the jobs that these student loan debtors studied to fill?

redistribution of income from the American middle-class to the banks and their global owners.

The banks pay 0.25% for the funds they lend and the Senate guarantees them a profit of 7.5-9.5% on the transaction, and we're supposed to be grateful? As an American I am disgusted, as the parent of a college age kid, I am angry.

I don't know what they are thinking frankly.

is a private company to whom I am to repay.

So I'm thinking while it is government subsidized, Stafford loans are administered through some sort of public/private partnership. I'm guessing the private company essentially has it's money secured by the government in exchange for government holding the power to set rates. I'm sure the banks weren't cut out of the loop altogether on these things. I surmise that increased rates contribute to loan institution profitability even though they are "federally funded."

"In 2009, President Obama championed successful student loan reforms that removed the banks from the program and ended their high fees and abusive lending practices. "

http://www.uspirg.org/news/usp/federal-government-makes-billions-student-loan-borrowers-yearly

The government is borrowing the money and lending the money (for this program we are discussing referenced in the OP).

So the government borrows the upfront on the markets. The official term is 10 years in repayment, which makes the actual term of the loan more like an average 12 years (for a four year school, the first installment will be about 4 1/2 years before the repayment term starts).

However under the flexible repayment options, the repayment term could be 25, making the average loan term more like 28 years.

So the interest rate to compare to would be between the 10 year Treasury and the 30 year Treasury, plus the administrative fees:
http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/

Current yields are 2.48 - 3.57. If you added 1% for costs, that gives you an average 4%.

You can't compare overnight rates for banks to the funding costs for these loans, because these loans run over a decade.

You can compare them to 15 year mortgages, which are secured. The student loans are not and a lot of these loans or the interest on them are being written off.


Effectively, these loans are probably going to be 30% writeoffs. That would imply a current "good" rate of about 5-6%, which is designed to break even over time (neither earning nor losing principal).

both fellating the corporations.

when banksters are borrowing gov't money at less than 1%?

when the big banks are rigging LIBOR (& thus other interest rates)?

the whole thing is rigged to suck money from the little guys.

Lets go!

"but Democrats won a protection for students that rates would never climb higher than 8.25% for undergraduate students. Graduate students would not pay rates higher than 9.5%, and parents' rates would top out at 10.5%. "

Democrats "won" a protection? Democrats caved . . . as usual, to their corporate masters. 10.5% is nauseating. My student loan rates back in the Dark Ages was 3% and there's no way in hell it ever needed to be raised any higher.

10.5% and they're BRAGGING about it?

and possibly other states.

They caved after credit card companies threatened to cut their residents off.

The students are getting screwed once again.

Think again, perhaps this weekend while you're checking out your farm subsidies that the American taxpayer is footing the bill for.

Vote them out--get realistic people who actually care and will do their job of representing the people instead of themselves, corporations, special interests with lots of lobbyist cash, etc.

If we could get rid of all the self serving, corrupt people in Congress, things would get better in America. Until then, more of the same.