Plan to Change Student Lending Sets Up a Fight

[azurnoir]

Source: NYT

WASHINGTON — The private student lending industry and its allies in Congress are maneuvering to thwart a plan by President Obama to end a subsidized loan program and redirect billions of dollars in bank profits to scholarships for needy students.

The plan is the main money-saving component of Mr. Obama’s education agenda, which includes a sweeping overhaul of financial aid programs. The Congressional Budget Office says replacing subsidized loans made by private banks with direct government lending would save $94 billion over the next decade, money that Mr. Obama would use to expand Pell grants for the poorest students.

“The administration has decided that it wants to capture the profits of federal student loans,” said Kevin Bruns, executive director of America’s Student Loan Providers, a trade group that is fighting Mr. Obama’s plan.

To press its case, the nation’s largest student lender, Sallie Mae, has hired two prominent lobbyists, Tony Podesta, whose brother, John, led the Obama transition, and Jamie S. Gorelick, a former deputy attorney general in the Clinton administration

Read more: http://www.nytimes.com/2009/04/13/us/politics/13student.html?partner=rss&emc=rss

[corpseratemedia]

1. lol the author must mean REexpand since Reagan repeatedly slashed Pell Grant funding

..and I was on the tail end of that bootstrap garbage

I'm glad that the government wants to "capture the profits of federal student loans" since they are ..federal student loans and the profits should go back to future students who need the help. Look at what their privatized system has done to schools and student aid, f****rs.

[kristopher]

2. Important story

K&R

[BlooInBloo]

3. hahahaha! This is awesome. Gobama!

[defendandprotect]

4. We need a national program to send everyone to college . .. if they wish.

Every state can start a fund -- and/or Federal government can begin it --

let's get education - colleges/universities -- our of the hands of corporations/military --

and back into valuing education for its own sake.


Also -- student loans used to have a usury limit of 6 years to pay off --

now, they can go on forever. We need to return to usury limits -- rates/terms/length of loans.

[LuvNewcastle]

6. I wholeheartedly agree.

It takes a degree to get just about any type of decent job these days. If we can provide elementary and high school educations, then why not college as well? Our young people shouldn't have to enlist or go into deep debt in order to further their education.

[Occulus]

8. Furthermore, there are *many* subjects that can be taught wholly online

There is no reason to assume we need to build a slew of new campuses- although doing so would create a whole pile of construction jobs as well as places for people to go to school. All we really need is the infrastructure necessary to deliver the content.

Let me give you one small real-life example you can see on this very site. You know that award image on the DUzy Awards- the one with Rofl on top of the trophy? I made that using a 3D animation package called Blender. Blender is open source, and in many ways just as powerful as commercial packages priced into the thousands of dollars. Because Blender is free, virtually all of the education involved in using it is also free.

That said, there are also a number of online pay-for-access courses, as well as DVDs filled with video tutorials and so forth. The point is, all one needs to get this particular set of skills into their heads is a computer- any reasonably recent PC or Mac- with an internet connection.

Online learning has several advantages, but the biggest one is the pacing. Adult students can still live their lives and go to work and raise the kids and love their spouses while they learn. College and university settings aren't necessarily accommodating to the realities of adults' lives. Online learning negates that disadvantage.

[defendandprotect]

40. Completely agree -- knowledge doesn't originate in colleges/universities . . .

Since tape/video we've had the option of educating via TV/computers --
what difference if a professor lectures to an class or to a class plus thousands
more watching via internet or tape?

What we have had for a very long time is education based on buying a piece of paper --
and the wealthiest among us want to reserve that right to themselves.

As Lani Guinier recently said on C-span, "talent is equally distributed among all people" --
barring any of us from education is depriving society of knowledge.

Imagine the trash that's coming over our TVs replaced with learning programs of your own
choice!

Personally, I rather regret having let my kids go off to college away from home.
Further, while I don't embrace "home schooling" I think all parents have to supplement
their child's education -- however, the school work load/long day as it is setup and
parents other work kinda precludes doing that.

I saved the Blender program to look at another time - thank you. :)


Just a PS on this . . . I also prefer the idea of people/children educating themselves as
their need for specific information develops. That idea of learning being a circle - not
important where you begin -- but a continuing on.

[Xithras]

43. Online education is no panacea, and is losing popularity in some circles.

As a college instructor who has taught a few online courses, I've seen the downside to these things. Generally speaking, online courses have drop rates up to 300% higher than traditional courses (especially in classes involving hard disciplines like math, and most especially among students taking lower level courses). Why? Well, actual research done with actual students has shown that online courses require a much higher level of personal discipline to complete properly. If a student has to be in a classroom between 1 & 2 pm, at the risk of otherwise missing out on important lecture information relevant to passing the course, most students will do whatever they need to make the course on time. Students who are taking online courses have a tendency to procrastinate without those hard schedules. The lecture materials posted on day one will still be posted on day ninety, so a very large percentage of online students tend to perceive timely completion of their work, and the overall pacing of their course, to be less important. This leads to a deluge of students at the end of every semester who cram to complete their assignments on time. Since virtually all online courses are paced to keep students working throughout the semester, students who improperly pace their coursework are at a fairly extreme risk of failure.

The other major problem are the very life challenges you cite as positives to online teaching. While it's great that a housewife can take college courses while watching her babies, real world research on student retention has shown that those babies will probably distract her while she IS studying, lowering her odds of passing the course, or the grade she will receive. The old rules of thumb for doing homework still apply...homework and studying should be done in a quiet area with no distractions, and should be done in one sitting to maximize learning. Statistically, it's much harder for working adults to do that when there are kids, spouses, or roommates running around. It's bad enough that people have to deal with that when trying to study or complete homework for a physical course, but when you subject the actual course time to those types of distractions, knowledge retention drops considerably. Think about it for a moment...how well would 40 students in a traditional math class do if the class were taught with an audio track from Sponge bob Squarepants playing in the background, a screaming baby in the room, and a couple of little kids running around while the lecturer was trying to explain statistics? The students would be distracted and wouldn't learn as much. In a home situation, that exact situation exists every day.

About two years ago I taught a 12 week Javascript development class online, and the course was paced so that students were turning in one application and two short assignments per week (five questions each). The first week, the students started with brain-dead simple programs that popped up Hello World! messages. By week 12 I had them performing client-side XML data merges, script based XSLT transforms, writing complete browser based video games, and AJAX applications. About 40% of the class logged in more than once a week, and among that group the pass rate was 100%. Not a single person who logged in weekly failed the class. The remaining 60%? A chunk of them logged in every few weeks, and only a couple of them passed. The majority, however, waited until the last two weeks of class to even start the course content. Among them, nearly all failed. Even the ones who passed barely scraped by with C's and D's.

It's for this reason that the self-paced concept has been largely eliminated from online courses over the past couple of years. Most colleges and universities now host their online courses using the same concepts used in traditional classrooms. Assignments are only open for a week or two, availability of lecture data is limited. Tests are given weekly and cannot be made up at the end. Some schools are even experimenting with the idea of requiring daily attendance...if you don't login daily, you're marked absent. The results of these experiments have been mixed. A lot more students simply drop the online courses when they realize that the courses require the same discipline as a physical classroom (a bad thing.) On the other hand, the students who complete the course typically have pass rates on par with students who complete traditional courses (a very good thing). Nobody has yet figured out how to solve both problems at once, and develop and online course system with both pass rates and student retention rates on par with traditional classroom settings.

[SkyDaddy7]

22. We have to fix K-12 FIRST!!!

Flooding colleges with students who would never graduate college is already a problem on many fronts. However, the most important is it would take away from those students who are there for an education and not just to party. I have no problem at all with making sure every student that wants an higher education can get one but that does not mean I agree with opening the doors to anyone and everyone who simply wants to spend a semester or two partying...Everyone who has been to college knows what I am talking about.


The sad thing is today you have this sicko lenders who tell students who they know will never finish college that they will do fine "Here take this loan" and all they get is debt and no education...And are that much further behind in a career.

[bluerum]

24. Partyers can get an education too. This is a canard that has been used

forever - If you lower the barriers to education you reduce the value of the education. It is simply false. Sounds good though.

Fact is that there always been a "partying" element in college and society at large. This is life.

Another fact is that financial institutions have been using education as a cash cow since reganomics. In many countries, higher education is free AND required. I will settle for less expensive.

[Odin2005]

32. I've read that complaints about partying students goes back to the 1200s!!!

When the first universities were founded. Some things never change! :rofl:

[Gemini Cat]

25. Students who continually party generally flunk out.

So they're basically not a problem.
A lot of times, the same kids will grow up and do very well in school.
Everyone deserves a chance.

[defendandprotect]

41. First, the idea that you have to be 18-22 to be in college should change . . .

Second, any Bush programs should be removed from schools --

Third, many people don't know that often over decades CIA/intelligence budget money
was hidden in our education budgets - as much as 50% of the education budget!
For decades now we've been "throwing money into weapons making/military corporations/
intelligence" and we now have two unnecessary wars raging.
I think we should return to properly financing K-12.

Third, we should stop thinking about education from 9-3 every day --- as another poster
so well pointed out that doesn't suit the realities of adult working lives.

Fourth, I don't think it would be a bad idea to encourage more students to study in their
home states, even in their own home areas. I think there's a lot of wasted time and money
involved in everyone sending their kid off to some other state to be educated.

Fifth, I'd also recognize that the experience of working over four years is also an
education -- especially if we encourage more companies to be willing to train employees
again.

Gore Vidal often says . . . "The mind deprived of information devours itself."

And I really do agree that there is a hunger for learning in all of us --
and very few of us are averse to improving our lives thru education.

When education within the walls of our schools is so boring then I think the problem is
not with the student but the way that we are doing it. And I think computers in our schools
will change a lot of that -- allowing students to begin to educate themselves.
Because that's really what has to happen anyway.

[gtar100]

5. Private students loans are a lot like eating children

A sick, twisted practice of living off the hopes and dreams of our children. Actually the hopes and dreams of humanity. All for a profit. The very fact that we do not fully subsidize students for learning at universities and colleges tells me just how little we as a people really give a shit about our future. We make it hard for students to get in and we make it hard on them when they get out. For what? A capitalist's profit.

Today's truism is that any good idea that gets to Washington will be resisted and corrupted if it costs money for some entrenched interest group. How ironic it is that the rich keep this world a bloody hell just so they can keep their comforts.

[northernlights]

19. not just our children, either

those of us whose industries tanked right when we were reaching our peak earning years shouldn't be forced to take on massive debt or spend our retirement savings -- or both -- just to "re-invent" ourselves.

Some of us already have useless BS degrees left from those heady days of the late 60s when hs school advisors encouraged (at least women) to "get a liberal arts degree. you can always learn a career later."

Now we have a useless degree, useless career experience, unwanted skills, we're underqualified and overqualified for everything at the same time. And we don't qualify for any aide for a useful degree, beyond usury loans that will put us in debt until we're 80 or so.

It's just. not. right.

[Tansy_Gold]

26. A-freakin'-men

These are debts taht can't be discharged in bankruptcy, can incur outrageous interest and penalties, and are with you 'til you die.

(Please note that the nation's military academies are FREE. What does that tell you?)




TG

[defendandprotect]

42. Couldn't be ....

any better said --- !!!

:)

[lovuian]

7. I think the government can loan its own money

they don't need a middle man

let us hope this allows many to go to college

[Name removed]

28. Deleted message

Message removed by moderator. Click here to review the message board rules.

[AlphaCentauri]

9. K&R for the students

and for a better future

[mwooldri]

10. Let's go for it!

Next time I go back to school and if I need a loan (got too many already but if I need to...) ...

I will definitely be insisting that the student loan office at the school works with the feds.

I went to two universities: NC A&T State and East Carolina University. Two fine great schools (medical problems caused me to withdraw from each). NC A&T State did its student loan program primarily direct with the government. East Carolina University works with College Foundation of North Carolina. My loans with the Direct program were about 2% cheaper than through College Foundation.

If you are at college or university and your student loan office will work with a variety of lenders ask them if they can go with the Direct program. It could be cheaper for you in the long run.

Also if you have student loans and want to consolidate right now there's pretty much only one game in town: the feds. For me, this was my "government bailout" as it cut my student loan payment obligations down from about $600/mo to under $185/mo. Downside is that I am paying longer but I don't have $600/mo right now.

Mark.

[Laelth]

11. "The administration has decided that it wants to capture the profits of federal student loans."

Good!

:applause:

:dem:

-Laelth

[Tansy_Gold]

35. There should be no "profits" on student loans

The "profit" should be an educated citizenry

Duh.

[gulfcoastliberal]

12. Gee, think the bankers will win?

I hope not but expect they will get what they want with their fancy lobbyists.

[teknomanzer]

17. To hell with the bankers.

God damned bankers have to have their hands in every pot - I'm not a Marxist but I'm sick - fucking sick of the greed driven capitalist industry that is banking. One need but take note of recent events to see how malevolent this business really is. Their greed has screwed us all.

It is not necessary nor desirable to make a profit off of every human endeavor. Education and health care should not be profit driven. Their benefits are self evident and they profit the whole of society. Insurance plans and student loans only profit lazy assholes who contribute jack shit to humanity.

[QC]

34. I have no doubt of it. n/t

[Hawkowl]

13. Outstanding!

This is a very good move!

[backscatter712]

14. I'm going back to college for a second degree, and the only loans I'll take are federal loans.

At least with Federal Direct loans, the .gov is very much willing to work with you if you have employment problems after you leave school. Monthly payments are pretty low and the interest rates are low.

I've heard of so many people getting enslaved when they take private loans. Interest rates are higher, if you screw up, there is no escape - you get sued, your wages are garnished, you can't get the debts discharged with bankruptcy, and you can't even refinance.

I will not do private loans. Sallie Mae can eat shit and die.

[eridani]

15. Excellent! Please let your congresscritters hear about this n/t

[Trajan]

16. GREAT ! .... But congress MUST hear from us about this ....

Where are the people's lobbyists when we need them ?

[and-justice-for-all]

18. Kick ass! Make it so! nt

[rollingrock]

20. How quickly will he cave?

Sounds good, but I can't imagine the banks ever not getting their way with this administration. I hope I'm wrong but I wouldn't be surprised if he and this Dem congress capitulate in the end. They are well known for folding like a cheap suit under any kind of corporate lobbyist pressure.

[fasttense]

21. Not only was Sallie Mae’s chief executive, Lord, skimming huge profits and executive salaries

off the government sponsored student loan program, but they were shipping the jobs overseas.

"Sallie Mae’s chief executive, Albert L. Lord, held a town-hall-style meeting last week at the company’s loan center in Wilkes-Barre, Pa., with two Democrats, Senator Bob Casey and Representative Paul E. Kanjorski, to announce the return of 2,000 jobs that were sent overseas in 2007."

What a bunch of crooks. All they did (and want to continue to do) was take millions in salaries and profits from government money they were given to administer, and give the remainder to students. All the while sending the handful of jobs they had overseas.

Welfare for bankers, what a racket.

[Selatius]

23. I hope Obama KICKS THEIR ASSES.

The Pell Grant program has fallen victim to tuition price inflation, and it's time the trend is reversed with the program expanded.

[liberal N proud]

27. k r

[barbtries]

29. i'm on Obama's side in this fight

with a 16-year-old son talking about joining the military because we don't know where the money's coming from for his college education. and even if i was not directly invested in this issue. we need to educate all of our kids, not just the rich ones. and it's scandalous that those graduating are burdened with debt that will keep them enslaved for a good part of their adult lives.

[JPZenger]

30. Sallie Mae Moved 1000 Jobs to Key Congressman's District

Sallie Mae is in the process of moving 1,000 jobs from their overseas outsourcing offices (I think Pakistan) to Downtown Wilkes-Barre. That just happens to be the district of Congressman Kanjorski, who has great influence on these matters through his committee. Kanjorski's family also owns buildings in Downtown Wilkes-Barre.

I will never forgive Sallie Mae for charging 19% interest rates for some college students a couple years ago. That was the subject of an investigation by the Allentown Morning Call and a Committee of the Pennsylvania Legislature.

[choie]

31. You gotta love who Salli Mae has chosen for lobbyists

two "Dems" - Jamie Gorelick and Tony Podesta. (how did that 9/11 commission go, Jamie?).

[Odin2005]

33. IMO college should be totally free to anyone who graduates with at least a B average.

[AlphaCentauri]

36. Agree, that should be part of an education reform n/t

[InkAddict]

37. The gov and private banks approved these subsidized loans

then succumbed to sending the jobs away that would assure repayment - go figure? I guess those CEOs knew just how to steal it away from the rightful lenders - the gov, and those they chartered to handle it outside their span of control, all the while creating and promoting degree programs without relevance so students could actually repay and credit card programs that entrapped so students and already working (taxpaying) parents could not. For heavens sake, many have already declared they are financial "dead men walking." Why prolong the torture?

Cripe, just shoot me now - I'm sure the public would get over the outrage of the assassinations in about two weeks. And then, they could just write off the loans and pink-slip a few collectors call center and work-from-home jobs to boot.

[high density]

38. Sallie Mae is a joke

We do not need them to be a go-between in this day and age for Stafford loans because the government can service these directly. Obama has the right idea.

[Winterblues]

39. I seem to recall clinton had the same program. direct loans to students at zero or very low interest

It was one of the very first things reversed by the Bush* Cabal. Gotta take care of those bankers you know, at our children's and our future's expense.

[Waiting For Everyman]

44. The private loans are unconscionable... it's indentured servitude like centuries ago.

Free the young people, and let them get on with their lives, dammit!

This needs to happen... and without the usual Repig technicalities which undo any positive effects.