Cutting banksters out of the loop

[Jam]

http://www.nytimes.com/2009/09/18/ed...c.html?_r=1&hp

The House of Representatives on Thursday passed legislation that expands federal aid to college students while ending federal subsidies to private lenders.

[...]

The Senate is expected to take up the legislation at the end of the month, amid stepped-up efforts from private lenders to block a change they say will cost thousands of jobs.

Republicans and private lenders alike have characterized the student-loan legislation as an intrusive government takeover that will erode consumer choice — the same arguments raised in opposition to health care reform.

Could it be that the administration started growing some balls?

and...

Starting in 2011, the amount of the scholarship will be linked to the cost of living, rising along with the Consumer Price Index, plus 1 percent.

...they acknowledge that CPI underestimates the increase in the cost of education.

[don]

Re: Cutting banksters out of the loop

I saw it on the MSM last night, a Republican hack answering this proposal by asking, "Would you like the people who run FEMA to run the school loan program?" Apparently his mouth was sown shut during Katrina. (sorry I don't have a link- couldn't find it) Don't overlook who finances the Obama machine- Wall Street and the Big Banksters. The easy prediction is they will profit by any federal change, not suffer. (See Healthcare Reform)

[rlskaggs2003]

Re: Cutting banksters out of the loop

Lovely. Another government program to take even more money from my wallet at an ever accelerating rate so that some kid somewhere can overpay for a degree in art history, or the like.

[Munger]

Re: Cutting banksters out of the loop

Lovely. Another government program to take even more money from my wallet at an ever accelerating rate so that some kid somewhere can overpay for a degree in art history, or the like.

You are uninformed. The is not "another govt. program". The govt. has been in the student loan game for a long, long time.

But the way it has been in the game has been utterly, utterly retarded. They let private issuers loan the money but give them a 90% backstop and let them keep the interest. So essentially it's been another "heads we win tails the taxpayer loses" load of bullshit. With this reform the govt. gets to keep the interest. Which is only fair since it is essentially putting up the money.

And, the private issuers provide no actual service. There is no competition or benefit. Students don't even get to choose their issuers. The school just tells them who they are using. And its not like a 19 y.o. kid cares to look into his loan issuer or could even figure anything out. What's the difference anyway? They give you money you pay it back. Yay free market.

Would you like to loan money at 8% interest with a 90% govt. guarantee knowing that the person taking the loan can't extinguish the debt through bankruptcy?

Exactly. I wonder why the "private" lenders are fighting so hard to kill this bill.

[Jam]

Re: Cutting banksters out of the loop

That's exactly why I am surprised at the proposed change as it seems to go directly against the interests of those financiers. Could it be that they are trying to kill the smaller money outlets and consolidate the power in the hands of a handful of big banks?

Don't overlook who finances the Obama machine- Wall Street and the Big Banksters.