Senators Reach Deal on Student Loans

AP ^ | 07.17.13 | By PHILIP ELLIOTT Associated Press

[Perdogg]

Heading off a costly increase for returning college students, a bipartisan group of senators reached a deal Wednesday that would offer students better rates on their loans this fall but perhaps assign higher rates in coming years.

The deal would offer students lower interest rates through the 2015 academic year, but then rates were expected to climb above where they were when students left campus this spring. The interest rates would be linked to the financial markets, but Democrats won a protection for students that rates would never climb higher than 8.25 percent for undergraduate students. Graduate students would not pay rates higher than 9.5 percent and parents' rates would top out at 10.5 percent.

[traditional1]

"Democrats won a protection for students that rates would never climb higher than 8.25 percent"

Oh; the Interest Rates will go UP, alright, and Bankers will be made whole by fleecing the Taxpayer, as always, to buy the Student Vote with their money.

Republicans have no balls, and we have a one-Party System.

[Carry_Okie]

The interest rates would be linked to the financial markets, but Democrats won a protection for students that rates would never climb higher than 8.25 percent for undergraduate students.

Back in the 80's my student loans were 9%.

[E. Pluribus Unum]

Hocus pocus. Pay no attention to that man behind the curtain.

[RB156]

Of course, they punt without solving the real problem: massive tuition inflation due to a never ending influx of government bennies. Take away the bennies, and the colleges will stop selling a piece of paper for $200,000 and offer reasonable and afforadable tuition.

[mikrofon]

but Democrats won a protection for students that rates would never climb higher than 8.25 percent for undergraduate students

over the objection of Republicans who no doubt wanted to apply usury rates and deny the right of a college education to middle class families....

[Hoodat]

Idiots. The best thing they can do is to get the hell out of the way and re-open the student loan market to the private sector.

[Hoodat]

Back in the 80's my student loans were 9%.

I took mine out in 2005/2006. My interest rate is 2.38%.

[max americana]

No. American kids nowadays have no balls and too lazy to actually work while going to school to pay for their tuition.

I only got the grant for my frosh year but the rest was taking part-time jobs. That included being a bodyguard/driver for an escort service, pizza delivery dude, dj for a strip club (ah, the stories), bartender etc. That’s why I never almost owed anything after graduation.

[Jumper]

Students who "accept" these loans use the same logic they do for home loans and car loans. A home is life long proposition as is a student loan. Car loans are something else altogether thought in that going from a base model to a mid-level model may add between $2000 and $4000 for the manufacturers cars such as a civic, sonic, etc.; the cost of financing the extra few thousand dollars is about $15 per thousand at 1.0%. I believe that Students who have only bought a car with those 0.9%, 1-2% or even a 3% car loan over 72 months maximum period are not fully aware of the cost of a Government backed student loan - most of these kids will not have the $400-500 a month to pay down $75,000 in debt. My son is attending East Carolina University and I had him do a survey of his friends; out of 25 kids, he and one other friend are the only ones without student loans. His two room mates both took out the max which was something like $17,000 last year, and they did the same thing the three previous years. One of the kids that graduated last year just found out that in order to pay it down and not tread water or go in the hole was going to take over $450 a month to service his 5 years of loans for his 4 year degree.

My other experience was with my boss in the State Department. He had student loans going back 17 years, and he told me at his age of 44 that he would be 56 years old when he paid them all off, and that was with the annual government assistance.

[nascarnation]

Another victory for the Dems.

The whole end game of “Big Education” is massive donations to Democrat politicians from overpaid liberal profs and admins.

[Eska]

We have two kids in school, spending a little over 3K/month ten months a year; this fall will be the 4th year at it. We fight it, drive old trucks, no vacations, and no new toys because both the wife and I are afraid the kids won't have it as easy as we had it, no joke. We don't want them in any debt what so ever. I personally remember friends of mine paying what amounted to an extra house payment until they were 35 for their student loans.

The kids tell me almost every kid at school has their loans maxed out. Something don't seem right in our Country? Good thing was this year our daughter got an RA slot and also $400/semester Pell Grant, first time either of my kids got a penny.

[max americana]

“The kids tell me almost every kid at school has their loans maxed out.”

Same here with my classmates from the same major, or their parents bailed them out. I still know after 5 years from graduation, some of them still owed tens of thousands. But nothing ever beat my “real world” education from those after college jobs. I learned more about accounting from the escort service madam that I worked for than I did from my classroom professor.

[traditional1]

Nealy ALL of us old-timers paid our own way, and did multiple part-time jobs, if necessary. When your parents couldn't afford to send you, you went into the Military, and came out and went on the GI Bill, and STILL worked part-time (or even full-time, and went to night classes).

Today, college kids take basket-weaving, diverstity training, sensitivity training, etc. just to fill up their schedule to minimum requirements, and then just go looking for the "hook-ups" and beer parties, while getting Taxpayer-funded loans and grants for their use....and now, we are to pick up the tab for their partying and time-wasting.....what a great Country!

[DPMD]

Democrats own the Senate and John McCain. So why don’t they just pass a law that provides interest free student loans, since the government has taken over that industry? Could it be they love their revenue so much they’ll even screw the students they claim to love so much?

[headstamp 2]

Kick the can down the road.

[GeronL]

more handouts and gifts and vote buying

[Lancey Howard]

Senators Reach Deal on Student Loans

That's nice. Is the House going to weigh in?

[Lancey Howard]

My son was required to take a “diversity” class at college (Temple University in Philly). He perused his choices for fullfilling the “diversity” class requirement and opted for a “diversity” class on Native Americans, figuring it would probably be the easiest one to stomach among the choices offered.

His “professor” was black (naturally - - these mandatory “diversity” classes are designed to provide employment opportunities for people who majored in “African American Studies”) and one of the books REQUIRED for the class was a book written by that famous “Native American”, Ward Churchill.

I kid you not.

[Vigilanteman]

If any bank operated on the same basis as SallieMae, the government favored crony capitalist student loan virtual monopoly, they would be hauled into congressional hearings and probably be litigated out of business.

Among their abuses are:

• Easy to get, hard to repay loans which make zero effort to distinguish between marketable and unmarketable degrees.
  
• Highly paid senior executives who have little or no accountability.
  
• Interest only loans and hidden fees designed to keep the borrower in debt forever.
  
• Interest rates which are typically two to three times larger than prevailing home loan rates.

  Remember BO bragging about making the student loan business more efficient during his re-election campaign by eliminating the middleman, IOW, competition to the government?

  This is the next bubble waiting to happen-- millions of borrowers saddled with debt which they have little hope of repaying and cannot discharge. A homeowner who is foreclosed, at least, can walk away from the debt through the bankruptcy process.

  The only real long-term solution is to phase out SallieMae and privatize the student loan business. The outline of such a plan to do just that:
  

• Immediate write-off of 30% of outstanding balances, 25% loan forgiveness to the borrower, 5% as a fee to the educational institution where the loan originated to collect the remaining 70%.
  
• Authorize the originating institution to suspend degrees and transcripts on loans that become delinquent or to sell them at a discount to third parties.
  
• Originating institutions still unable to collect or liquidate the loans would be subject to a lien on their endowments, real estate or other assets.
  
• Those which have sold worthwhile marketable degrees would have little to fear. Those which have not maybe deserve to have their asset base reduced accordingly.

  In conjunction with this program, all borrowers which are current on payments after provision #1 kicks in would be able to apply and get an interest rate less than or equal to the rate they are paying on their primary residence. It makes no logical sense to have people paying more than double the rate on student loans than they are paying for mortgage loans secured by real property.