Posted on 09/27/2007 8:18:59 PM PDT by DogandPonyShow
President Bush signed legislation Thursday aimed at making a college education more affordable to students by slashing $20 billion in subsidies to student lenders, threatening what could be the largest private equity takeover of a U.S. financial services company.
Coming after months of scandals involving kickback schemes and conflicts of interest among lenders and college officials, the legislation was expected to shake up the $85-billion student loan industry, with some turmoil already evident.
The proposal has thrown into question a deal that a group of investors had to buy student loan maker Sallie Mae for $25 billion.
The group, led by private-equity firm J.C. Flowers & Co., says it is no longer interested in following through with the $60-a-share deal because the terms of the sale are no longer acceptable since the legislation will affect its core earnings.
The bill also sets up a loan-forgiveness program for college graduates who work for 10 years in public service professions.
It also would cap annual payments for students at a percentage of their income.
Colleges would be forced to do one of two things (if their customers could no longer afford their services)....Reduce costs (cut bloated Prof salaries) or go out of business.
Corporate welfare for University, Inc.
Every college has become a profit-making business with all the benefits of non-profit status.
This will be helpful.
The title you used “Bush signs new student loan relief bill” was not the title at the linked source and had to be changed.
We’re trying to reduce the number of duplicate threads. Please do not alter titles. Just use the original published title.
Thanks.
The dirty little secret across college administrative offices....Is that, if the Gov't gave out less loans / grants......College costs would go DOWN. Colleges would be forced to do one of two things (if their customers could no longer afford their services)....Reduce costs (cut bloated Prof salaries) or go out of business.
Exactly! You just summarized the main problem with government welfare of any kind. It's just too bad that big government leftists don't have the ability to see past their own noses. If people were able to just understand this simple concept then the price of tuition would go down and we wouldn't be hearing these Marxist calls for "free" college for everyone.
No problem
Precisely. There is absolutely no interest in academia to lower the cost of college because they know they get students to go cap-in-hand to the taxpayer to help pay for increasingly bloated tuition and fees.
And all that money that lines the pockets of academia gets funneled through political contributions right back into the pockets of the Democrat Party. It's a perfect scam.
Colleges would be forced to do one of two things (if their customers could no longer afford their services)....Reduce costs (cut bloated Prof salaries) or go out of business.
Salaries are not bloated simply because many schools only or mostly hire adjuncts on a per diem basis. (Though there ARE some who get on the tenure gravy train.)
OTOH obscene amounts are spent to recruit athletes, build new, bigger and better buildings and SELL, SELL, SELL. (i.e. giving free space, time, food and entertainment to credit card companies to lure students.) Education is no longer about nurturing curious scholars- it is now about breeding sufficiently docile customers and EVERYTHING is geared to this. Words can not describe the consumerist culture students are inundated with from the first day of kindy on.
As for private schools, half the tuition is for the sake of the name- the entry fee, if you will, for saying that you went to Harvard, Stanford, etc. Perhaps, in the bargain of life, this is a worthy investment.
Colleges are not run efficiently because a) people give them money for free and b) the government subsidizes them with low interest loans.
They sell a product, but the product is subsidized, therefore the colleges are run very inefficiently.
The result is that most college students get out of college with $25,000 or more in debt.
Then...they have to pay off their loans, so they delay having children and many young people fore go children because they have college debt.
The result: giving money to colleges leads to less children in the world. If you think this is not a problem, you need to study up on your demographics. This is a big, big problem.
Universities are not efficient because there is no market forcing discipline. The private universities peg their tuition to the public universities.
I believe there is huge potential to reduce costs, improve quality, and unbundle services. Much undergraduate and graduate knowledge can be commoditized and delivered with much lower costs. Services that are typically associated with university education (dorm life, sports, athletic facilities, ...) can be purchased separately.
I wonder who is the champion for reduced costs and higher quality. It will take lots of initial capital and tenacity to overcome the entrenched mindset of university education. Education is too important for it to remain in its current state.
How about $30-50,000.00 in debt, after 4 years? I’d give anything if my kids could come out with a degree, having what is called the “average” student debt of $20-25,000...... It’s a horrible scam, and for the life of me, I can’t understand why we’ve put up with it for so long.
Amen.
Coming after months of scandals involving kickback schemes and conflicts of interest among lenders and college officials, the legislation was expected to shake up the $85-billion student loan industry, with some turmoil already evident... The bill also boosts the maximum Pell grant to the poorest college students from $4,310 a year to $5,400 a year by 2012 and cuts in half the interest rate on federally backed student loans... The bill also sets up a loan-forgiveness program for college graduates who work for 10 years in public service professions. It also would cap annual payments for students at a percentage of their income.Maybe I'll go back to school...
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