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| Home Front: Culture Wars |
| Hidden Costs in these Gov't Student Loans |
| 2010-03-30 |
| Posted because some of you have college age kids Sen. Lamar Alexander (R., Tenn.), the U.S. secretary of education from 1991 to 1993, tells National Review Online that President Obama's revamping of the federal student-loan program is "truly brazen" and the "most underreported big-Washington takeover in history." "As Americans find out what it really does, they'll be really unhappy," Alexander predicts. "The first really unhappy people will be the 19 million students who, after July 1, will have no choice but to go to federal call centers to get their student loans. They'll become even unhappier when they find out that the government is charging 2.8 percent to borrow the money and 6.8 percent to lend it to the students, and spending the difference on the new health-care bill and other programs. In other words, the government will be overcharging 19 million students." The overcharge is "significant," Alexander adds, because "on a $25,000 student loan, which is an average loan, the amount the government will overcharge will average between $1,700 and $1,800." "Up to now, 15 out of 19 million student loans were private loans, backed by the government," Alexander says. "Now we're going to borrow half-a-trillion from China to pay for billions in new loans. Not only will this add to the debt, but in the middle of a recession, this will throw 31,000 Americans working at community banks and non-profit lenders out of work." Alexander, a former University of Tennessee president, says the effects of Obama's policy could be felt for decades. "When I was education secretary, one of my major objections to turning it all over to the government was that I didn't think the government could manage it," he says. "This is going to be too big and too congested, and makes getting your student loan about as attractive as lining up to get your driver's license in some states." "It changes the kind of country we live in more than it changes American education," Alexander concludes. "The American system of higher education has become the best in the world because of choice and competition. Unlike K-12, we give money to students and let them choose among schools, having the choice of private lenders or government lenders. That's been the case for 20 years. Having no choice, and the government running it all, looks more like a Soviet-style, European, and even Asian higher-education model where the government manages everything. In most of those countries, they've been falling over themselves to reject their state-controlled authoritarian universities, which are much worse than ours, and move toward the American model which emphasizes choice, competition, and peer-reviewed research. In that sense, we're now stepping back from our choice-competition culture, which has given us not just some of the best universities in the world, but almost all of them." |
| Posted by:Sherry |
| #8 Most likely it'll be contracted out. The interesting part will be those who get the contracts. |
| Posted by: Pappy 2010-03-30 21:39 |
| #7 Glenmore points out the one thing that no one seems to have picked up on. How many federal employees will be required to support this program? And what will their wages be? |
| Posted by: tipover 2010-03-30 18:25 |
| #6 this will throw 31,000 Americans working at community banks and non-profit lenders out of work Yeah, but they can apply for the 50,000 new jobs with the Federal government that will have to be created to administer the same loans. And if they get one of those jobs, it will be at a 45% premium in pay, and better benefits and job security too - minus their government union dues and DNC 'contributions'. |
| Posted by: Glenmore 2010-03-30 17:11 |
| #5 Gov't Student Loan interest structure: a. Students from Red States pay standard 6.8% b. Students from Blue States pay standard 5.8% c. Non-US Foreign students pay 4.8% d. Students whose parents earns less than $35,000 per year pays 3.8% e. Students whose parents earn more than $35,000 per year pay 6.8% plus high-earner penalty of 1.2% per $10,000 dollars over minimum earner limit but not to exceed 22.8% (see Red State penalty Annex A for additional fees) f. Students having one special category (non-earner) parent as listed in Annex A, Schedule 101, deduct 8% from interest listed in paras a through e. g. Students having two special category (non-earner) parents as defined in Annex A, Schedule 101, deduct 16% from interest listed in paras "a thru e." h. Students paying in excess of -2.2% but not more than -27% must elect direct deposit option as prescribed in Annex B, Schedule 102. i. Students paying in excess of -27% must be reimbursed (free GM car lease option, laptop, meals, travel, etc, via Annex C.) j. All students with the exception of those listed in categories A and E qualify for job placement upon graduation. |
| Posted by: Besoeker 2010-03-30 17:04 |
| #4 it is ironic that educatyional costs are primarily driven by government. Instead of addressing the double digit % cost increases over the years the government just takes of the business of loaning more money to the stooges who go to college. Note: I am one of those stooges who went college and send 2 to college presently. |
| Posted by: airandee 2010-03-30 16:56 |
| #3 Of course indebted students could elect to work their loans off at Barry's Acorn Acres re-election farm. |
| Posted by: Besoeker 2010-03-30 16:30 |
| #2 The trust-fund kids really don't like competition? |
| Posted by: g(r)omgoru 2010-03-30 16:28 |
| #1 So, more inefficiency bought with more of other people's money that we can't afford to pay back. Our country will not survive 3 more years of this idiot. |
| Posted by: DarthVader 2010-03-30 16:20 |