This is a step further in making sure they control us and make decisions for us.
Get them out of their fancy airplanes...Keep them out of private business and keep them out of deciding who goes to school where - smells of the good old USSR.
Posted on 03/14/2009 6:31:26 AM PDT by Born Conservative
Revamping of student loan program could reduce need for private lenders.
Hundreds of Luzerne County jobs could be in jeopardy if Congress approves President Barack Obama’s plan for changing the federal student loan program.
In his budget proposal, Obama recommended that the U.S. Department of Education administer all of the federal loans for students by 2010, saving a claimed $4 billion a year. The change would drastically reduce the need for private lenders including Sallie Mae, which employs more than 700 people in its Hanover Township offices.
Sallie Mae is one of the nation’s largest providers of federal and private student loans and employs 8,000 nationally.
The administration’s budget proposes replacing the 44-year-old Federal Family Education Loan Program with direct loans from the government.
That’s something U.S. Rep. Paul E. Kanjorski, D-Nanticoke, said he would not totally support.
“Our main goal is to allow as many students as possible to afford to go to college. I also believe that we should have a student loan delivery system that includes both private lenders and the federal government through direct lending,” Kanjorski said in an e-mailed statement.
“I want to find a balance as we consider the president’s budget blueprint in the months ahead.”
Sallie Mae spokeswoman Martha Holler said the company would be keeping a close eye on the budget discussions and is prepared to offer guidance and help as the process moves forward.
“Our 700 employees in Wilkes-Barre, and 7,200 others across the country, are the best in the business, are equipped to continue to help students access college and are eager to keep their jobs. That’s why, as Congress debates the president’s budget proposal, we want to work constructively with them to ensure our employees will continue to meet the education financing needs of students and families.”
U.S .Rep. Chris Carney said he’d consider the proposal if it truly did save billions of dollars.
“While I will always fight to protect and create jobs in our region, we must explore ways to provide students and our taxpayers the most efficient way to manage the loan process. Any proposal that improves education while saving the taxpayers an estimated $4 billion deserves strong consideration,” said Carney, D-Dimock Township.
There would not be such a large market for student loans if most college students did not believe that college itself is an entitlement.
You just knew this was coming.
There is no way this will save money.
The 8000 at Sallie will lose their jobs and be replaced by 15,000 govt. workers sevicing the loans and doing it more poorly than the private sector.
“Ain’t” that the absolute truth.
As I was saying....
At least those employed by the US government would speak english! Seriously, Sallie Mae has been changing their policies recently to try and recoup their loans faster, and it's been making it harder on students. No more forbearances for one, higher fees, higher interest rates, etc. In this one instance, I say let the government take it over.
My brother works for a bank that is a major provider of student loans. He is involved in software development to support servicing of student loans. He indicated that a good number of his co-workers voted for BHO. He told them that they would likely lose their jobs if BHO and the Democrats won. Even his wife voted for BHO. I told her that she was voting to fire her husband.
This claim about cost savings is ridiculous. Student loans were collaterized. The government provides a subsidy to banks for the loan guarantee and interest subsidy. The banks make money on services provided to provide the loans, sell the loans, and service the loans. The rats are unhappy about the money banks make from selling the loans. Selling the loans provides financing. Without external purchasers of the loans, the entire loan amounts are just additional borrowing of the government. The government must sell its own bonds to finance the loans.
The essential issue is that the rats want to make university education another large federal entitlement. There is so much wrong with adding an another entitlement that I could write for days. University education needs an major overhaul to lower costs, improve quality, and modernize delivery of the product. The rat plans will ensure that higher education continues as a bloated, cottage industry almost impervious to efficiency.
Should the government not set tuition rates? If it takes over student loans, why not? And aren’t university salaries too high? Shouldn’t they be regulated? And, as for the curriculum....
Should the government not set tuition rates? If it takes over student loans, why not? And aren’t university salaries too high? Shouldn’t they be regulated? And, as for the curriculum....
This is a step further in making sure they control us and make decisions for us.
Get them out of their fancy airplanes...Keep them out of private business and keep them out of deciding who goes to school where - smells of the good old USSR.
Absolutely horrible outfit to deal with.
I’m in this business too (like your brother), but from the other end—I’m a federal employee (I resolve disputes about loans, process rehabs, etc).
I’m torn on this one. The Direct Loan program is definitely easier for borrowers to deal with compared to the complicated system of lenders, guarantee agencies, etc that is the FFEL loan program. Schools and borrowers seem happier with it.
Anyway, the gov’t has been subsidizing these private lenders forever, to ensure they make a profit. It’s not like there was pure free enterprise here. So I’m not sure it would make a huge difference for the taxpayer.
Lately no lender wants to get near these though, even with a subsidy (the credit crunch; usually I deal with subprime student loans, the long-defaulted ones).
Right now the gov’t is actually purchasing loans FROM lenders, who say they have no money to lend, using some of the “bailout” money.
All this said, I’m against the whole idea of student loans. Just raises the cost of tuition, and you should see these outrageous “dog grooming schools” that practically charge as much tuition as Stanford, no joke. Lots of dumb people take out huge loans to attend very bad, often worthless, trade schools.
I think taking on large amounts of student loan debt is a big mistake. Much better to go to a cheap community college for 2 years and then transfer to a public 4 yr state school.
You are misrepresenting the situation about government subsidies to private lenders. Independent of financing, the government subsidizes interest payments while students are in school. In addition, the government provides a guarantee of payment.
The additional subsidies you refer involve financing of student loans. Private student loans have been financed through the market. Lenders sell the loans so that investors provide financing. Direct student loans are financed by additional government borrowing. If private student loans are financed by additional government borrowing, approximately $1 trillion additional government borrowing will be necessary in the coming decade. To facilitate selling the loans in the market place, the government provides a fee to the private lenders. This fee has been substantially reduced. If the fee is an issue, a competitive bidding process could be created to increase competition among lenders.
I disagree with your assertion that direct lending versus private lending will not make a difference to taxpayers. Unless you think that $1 trillion in new government borrowing will not make difference, there is a substantial difference.
I disagree with your assertion that direct lending is easier for students. Direct lending has had many problems. Thus, direct lending only has 20% of the market. The private student loan market has operated well for students.
You’re right; the gov’t subsidizes the interest too, and yes, the gov’t has recently cut the additional subsidy to the lenders.
That’s why (that cut) many lenders are ready to flee the whole student loan business, at least the student loans I deal with, the “subprime” ones (”colleges”—aka lousy trade schools—which recruit “students” from parking lots and welfare lines, and then take the money from the student loans and close down). The high default rate, and subsequent lack of profit, isn’t worth it to the private lenders.
Anyway, for a gov’t program, Direct Lending hasn’t been too bad. I’ve been pleasantly surprised. The gov’t seems to be managing it pretty well.
Some Jo-Jo whose name is similar to mine — spelled differently, but similar — got a student loan to attend something called Climate Control Institute here. SALLIE MAE hounded me for the next seven years to repay it. If that was your brother, please forward his home telephone number to me.
I’m finding out, to my dismay.......
I'm not sure what you mean by that. Are you saying that students shouldn't borrow money to attend college? I still owe around $27,000 on my student loans but my earnings have more than doubled from when I worked as a carpenters foreman in commercial construction. I pay my loan amount every two weeks rather than monthly to get it over with and the Salliemae web site is great. I don't see where the Gub’ment could save money unless they subsidize the system to make it appear that way.
You have got to be kidding me. Yes the private sector wants to get the loans repaid. The only thing govt can do better is to tax the workers and take the money to bail out the students who can't pay.
Now repeat after me. The govt. is NEVER more efficient than the private sector.
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