Obama vs. Private Lenders over Student Loans

[Joanne98]

As part of his education agenda, President Barack Obama wants to overhaul the way the federal government helps students attend college, by eliminating the current program that heavily subsidizes banks that provide student loans. Instead of banks doing the actual lending, the administration wants to cut out the middleman and loan the money directly to students, and thus save $94 billion over the next decade, according to analysts at the Congressional Budget Office. Critics of the current system (the Federal Family Education Loan Program) have accused banks of collecting large fees for decades on student loans, which are 97% guaranteed by the US government. In addition, in light of the $700 billion bailout of Wall Street, the Obama administration isn’t too keen on maintaining the status quo by allowing financial institutions, such as Citigroup, Bank of America and Sallie Mae, to enjoy making easy money through the federally-subsidized student loan program.


But the overhaul is running into stiff opposition in Congress. Republicans hate the idea because it represents an increase in federal authority, and some Democrats whose districts include big banks are crying foul over a potential loss of jobs. Groups such as America’s Student Loan Providers are lobbying hard to derail Obama’s plan, and Sallie Mae has reportedly hired two big-time lobbyists, Tony Podesta, whose brother, John, led the Obama transition, and Jamie S. Gorelick, a former deputy attorney general in the Clinton administration.
-Noel Brinkerhoff

Plan to Change Student Lending Sets Up a Fight (by David Herszenhorn, New York Times)

http://www.allgov.com/ViewNews/Obama_vs_Private_Lenders_over_Student_Loans_90414

[Sarah Ibarruri]

1. Did I mention that I love our president? nt K&R!!!

[eridani]

2. I just emailed my senators asking them to support Obama on this

Please do likewise.

[AllyCat]

3. Losing those jobs is okay...they are not good jobs.

If your job is to make sure corporations skim money off the top of tax-payers' efforts to help the community, you do not have a good job. period. Go find some kind of work that helps people instead.

Flame suit zipped.

[readmoreoften]

4. I through my full weight behind Obama in this area.

He has already "compromised" and "balanced" quite a bit towards the right. I hope he actually fights for this one. It's definitely one that he owes his base. No one needs to come out of school with $1000+ a month loan payments--even after partial consolidation--to get a job at Starbucks. Not to mention that if you can't pay your student loans, a lien is put on your social security # and you spend the rest of your life on the lam from the law.

I know a female from an impoverished rural background who received a full math scholarship to an ivy league school, when she changed her major to biology she lost her scholarship for a semester and even though her degree is finished, they will not give it to her because of money owed and she now has a lien on her social. She is now 30. Her goal was to return to her rural southern community to teach biology in a public school. The schools where she grew up are desperate for teachers and she is homeless, living as an itinerant skilled laborer and running from government officials trying to locate her so they can take her tools as "payment." She's worse off than she was growing up in a trailer park and the kids in that trailer park still don't have a damn science teacher.

[Wednesdays]

5. This one line is bullshit

"Republicans hate the idea because it represents an increase in federal authority..."

I call bullshit. Repukes hate it because it ends the graft that's lining the pockets of their rich banking buddies. :puke: