Skip to comments.The Government’s Backward Approach on Student Loan Disbursement (Part 1)
Posted on 04/28/2012 5:10:39 PM PDT by Oldeconomybuyer
For the first time in history, Americans owe more money on student loans than they do on credit cards. At one trillion dollars and on the rise, the behemoth government takeover of the student loan industry has set into motion a new financial crisis.
The Student Aid and Fiscal Responsibility Act (SAFRA), a bill attached to the Affordable Care Act (a.k.a. ObamaCare), was signed into law by Congress on March 30, 2010. Essentially, the legislation scraps the bank-based program, and substitutes that with a direct-lending program, where students are required to take out loans through their financial aid office that are serviced by the government. The legislation was put into place to cut out the banker middlemen, so that the government could directly receive the interest income collected from the loans, thereby cutting the federal deficit. Today, 85% of all student loan debt is owed to the government.
In 2007, President Bush signed a Democrat backed bill which cut the interest rate on subsidized loans from 6.8% to 3.4%. Then Senator Obama, surprisingly, was one of only four Democratic Senators that failed to cast a vote on this critical loan reduction bill, yet now he is actively campaigning at colleges to renew this loan reduction, calling the rate reductions set to expire as completely preventable.
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let’s make this easy, shall we?
You owe on your student loan, either you pay something, monthly, or you are ineligible to hold any public office, any government job or any university or other teaching position until you get with the program and start paying.
I couldn’t afford to send my daughter to some fancy university, dorm life included, and I’ll be damned if I’m paying for some rich kid who overborrowed easy funds to blow off his loan onto my, and my daughter’s, back.
That's half the problem.
The other half is limiting loans to continuing university success in disciplines proven to be successful in the private industry arena (public tax-sucking disciplines need not apply.)
So, you see college education strictly as a job training exercise?
Debt creation is THE moral hazard in America.
Students have learned to create debt, to later on become leaders in Business and Government to create more debt.
Faint now in the distant background, are the words of Paul Harvey:
“IF YOUR OUTGO EXCEEDS YOUR INCOME, YOUR UPKEEP WILL BE YOUR DOWNFALL. And now you know the rest of the story.”
You must be one of those troglodytes who thinks that education is actually worthwhile, or even, gasp, that there are measures of worth beyond earning potential.
Thanks for the comment.
I get so weary of the many, many Freepers who see college education as a four-year exercise in training for a job. I have suggested on a number of threads which hone in on engineering as the only worthy degree (and I see that the person I directed that comment to is an engineer). I have suggested to that multitude that we should remove engineering as a college major and create institutes where only engineering disciplines are taught. The students’ time will not be wasted on other college subjects (you know, history, philosophy, and the like). just engineering classes.
That way, you see, people could cut their education, er, training, time in at least half and get what they want: knowledge of the great god, ENGINEERING.