What can Obama do without Congress on student loans?

[IndyPragmatist]

He said that he would circumvent congress if necessary. However, I think that would just leave the door open to the courts overturning his plan because of how it was done.

Personally, I feel like the timing of this is a bribe to students and recent grads. It's a good idea, but the timing is very very odd. He sees that the 18-30 demographic is not nearly as excited about voting for him this time compared to 2008. Many of the things he talked about the other day were going to go into effect in 2014, he just bumped it up to before the election.

So what can he do without Congress? I really don't want to see President Obama do something now, only to be overturned by the courts after the 2012 election. That will really piss off a lot of young people if that happens, and may have serious political implications.

[itsrobert]

1. Why should he do anything?

These people sign up for student loans, nobody held a gun to their head. They need to pay them back.

[democrat_patriot]

2. They are paying them back. Just over a longer period.

No gun to the head? Try making a living without a degree. Possible, but the odds are against it.

[Trailrider1951]

6. Robert, here are what the hard numbers look like from my

amortization spreadsheet that I put together for my student loans:

I consolidated my loans in 2001:

Date Rec'd Payment Type Payment Amt Appl to Princ Appl to Int Fees Princip Bal
3/2/2001 Mail $143.92 $0.00 $143.92 $0.00 $25,283.64


Here is what my latest payment information looks like:

Date Rec'd Payment Type Payment Amt Appl to Princ Appl to Int Fees Princip Bal
10/21/2011 Electronic Debit $236.69 $102.35 $134.34 $0.00 $20,369.36

And here are my totals to date, including my most recent payment:

Date Rec'd Payment Type Payment Amt Appl to Princ Appl to Int Fees Princip Bal
Totals: $19,296.91 $5,041.29 $14,255.62 $0.00 $20,369.36


So, you can see that after paying on the loans for about 10 years (this time frame includes about 10 months unemployment when I could not pay on the loan and the interest was added to the principle, around $4000+ in "capitalized interest"), I have paid nearly $20,000 on a loan of $25,283.64 and reduced it by only $5,000. The going interest rate when I consolidated was 8.25%, but I got a 0.25% reduction by signing up for electronic debit from my checking account. Oh, did I not mention that this loan CANNOT be refinanced for a lower interest rate. It CANNOT be discharged in bankruptcy. I am stuck with it. Fortunately, I am currently employed and current with my payments, but that could change in a heartbeat. Those poor students out there that cannot find jobs that will pay a living wage so that they can PAY those FRICKEN loans can only watch that principle grow and grow and grow.... Please try to have some compassion for them.

[ellisonz]

7. It's extortionate.

[itsrobert]

8. Student Loan Insurance

wasn't available to you when you agree to to the loan?

[Trailrider1951]

9. Student loan insurance?

WTF is that? My only choices were Default or Forbearance. I chose Forbearance. My payments were suspended, but all that interest I did not pay was added to the principle. Sucks to be me.

[itsrobert]

10. It's available at time you enter into loan contract

I agree they should rework loans for people that are in you situation, etc. My wife took out student loans. Finally paid it off after making sacrifices. Took 10 years of no luxuries.

[Trailrider1951]

12. I was totally unaware of anything like that

My "Loan Consolidation Representative" never mentioned anything like that. In retrospect, he was only interested in my signature on the proper lines. Like I said, sucks to be me.

[Demstud]

13. Same here

Never heard of "student loan insurance" and have never received any info on it.

[Marrah_G]

18. Holy crap

[Trailrider1951]

20. I'm going to update this for those who are not quite familiar

with the student loan scam:


www.studentloanjustice.org


We have been scammed. Both the banks and our so-called representatives in Washington, DC, are complicit.


This is my second favorite Pet Rant, next to the FRICKEN health insurance industrial complex. That is all.

[Matariki]

11. That's a crappy attitude.

Our nation, our society as a whole, will benefit from college being affordable and from not having a whole generation of people who either start their adult lives burdened with debt or forego higher education altogether. This isn't just a problem for the individuals who 'sign up for student loans', this is a problem for the future of our nation.

When I was in college back in the late 70's, college was *way* more affordable, there was lots of financial aid available for people who didn't have the good luck of being born into families that could afford to send them to college, and there was a very good government program of very low interest loans available to everyone. In 1980, my last year in college, Ronald Reagan was elected and immediately began to dismantlement student aid. Since then the cost of a college education has soared.

Your attitude of 'tough shit, everyone for themselves' is myopic.

[itsrobert]

15. Well, I couldn't afford college

Nobody gave a crap. Had to join the military to get my education. I don't go into debt unless I know I can pay it back.

[Matariki]

16. So fuck the future then?

You didn't "get yours", so no progressive social change?

[Matariki]

17. BTW - I'm assuming you did this post Reagan?

That was one of the deliberate moves his administration made - stripping financial aid to push poor & middle class people into the army.

Like I said, you have a crappy attitude. I'd think that suffering from those policies first hand you'd have some empathy for people coming after you and you'd fight for some social justice instead of just saying "screw everyone else".

[Marrah_G]

19. Robert- the answer to no one giving a crap is not not giving a crap.

If more people gave a crap about each other the world would be a better place.

[Erose999]

3. He thinks this will pacify the Occupiers and get them in for his re-election. Truth is he probably

can't do anything. But its making them think he's fighting for something for them. Just like in 2008, he's making a big progressive show, while the reality is he's just another Wall St. puppet.

[seacaves]

4. Here is a bit of information.

http://chronicle.com/article/Loan-Plan-Scores-Political...

[Yupster]

5. Here's the way I understand the proposal

And I just read a few articles. I haven't read the proposal.

Any way, the proposal would be to limit the amount of payments to a percentage of what the person makes above the poverty level and limit the payback time to 25 years.

The example the article gave was a person graduates from a real good university with a $ 200,000 loan. If that person then went to work for a non-profit and made $ 25,000 a year the person would only have to pay back $ 1,000 a year. After 25 years the person would have paid back only $ 28,000 and the rest would be forgiven by the taxpayers.

Of course that is an extreme example, but when the government took over the student loan program a couple of years ago it was said it would save the taxpayers lots of money.

[Demstud]

14. I like the idea, but I'm confused about the "savings" to taxpayers.

Though I'm not familiar with all the details yet, it doesn't seem to address the root problem of universities costing too damn much. If costs keep rising more than wages, then won't having the taxpayers pay off the remainder of the loan cost the taxpayers more every year?