Obama Touts Plan to Change College Loan System

[Hissyspit]

Source: Associated Press

Obama touts plan to change college loan system

WASHINGTON – President Barack Obama on Friday renewed his call for the government to stop backing private loans to college students and replace them with direct financial aid to young people. Obama said the surest test for success in the challenging economy is a college degree or other training, yet access to higher education continues to shrink as costs rise. To reverse that, the president repeated his campaign proposal that would eliminate the Federal Family Education Loan program that costs taxpayers $15 million a day.

"In a paradox of American life, at the very moment it's never been more important to have a quality higher education, the cost of that kind of education has never been higher. ... Yet, we have a student loan system where we're giving lenders billions of dollars in wasteful subsidies that could be used to make college more affordable for all Americans," Obama said at the White House.

The administration has pushed for federal financial aid to go directly to students, not to banks that lend money to students. Obama said he wants to eliminate the "middle men" lenders that he says add inefficiency to the system — "that's a premium we cannot afford, not when we could be reinvesting that same money in our students, in our economy and in our country."

Obama wants to end the decades-old, dual system the federal government uses to advance loans to students to pay for college. Under that system, students at some colleges borrow directly from the government, while others get loans from banks, nonprofits or state agencies that in turn receive subsidies from Washington. The president's proposal would switch the federal student loan system entirely to direct lending from the government.

Read more: http://news.yahoo.com/s/ap/20090425/ap_on_go_pr_wh/us_obama_college_costs

[underpants]

1. "Relentless" doesn't cover it, this guy is a slow steady drum beat

I am just loving watching the whole thing happen

and I love that I helped make it happen

[Orrex]

2. Does this do anything for people currently getting screwed by their student loans?

Or does it only help those who haven't taken out the loans yet?


(Cue the Righteous You-Should-Have-Known-Better Brigade in three... two...)

[Heddi]

3. My loans are down to $7700 from $13,000 for nursing school

not including the other $10,000 loans I paid off already from when I went to school for Culinary Arts.

Somehow, I feel it will only apply for future loans, not those that are paying off loans from years and years ago. Sigh. Just like housing help will only go to those with mortgages, because we all know that people who rent are rolling in dough and wipe their asses with $500 bills :sarcasm:

[Orrex]

4. My loan is down to about $21K from the $17K I borrowed in the first place

I'm not even asking that the whole loan be forgiven (though I wouldn't complain if that were to happen). All that it would take to make me happy would be to forgive the massive penalties applied over the years and also some kind of stabilization of the interest rate.

[juno jones]

8. Uh-Huh.

Mr. Feb's college loan has become an huge mess.

The kicker is that the school he went to has since closed down (during the silicon valley dot-com mess) and that now 25,000 dollar degree in graphic arts and multimedia is useless because noone will hire a graduate of a failed school.

I hope Obama will offer some relief. We'd be happy to pay off the principal, but the ever-mounting interest and penalties combined with the lender's preference for large lump sums makes it all but impossible.

We are not legally married because he doen't want to pass the debt on to me if something should happen to him.

[patrice]

5. Like my son. In and out of work for 10 years, finally settled into something decent but only about

1/2 of what he expected to be making 10 years after his degree . . . listening to lay-off planning AGAIN!!!

It's all I can do to keep his spirits up, so that he doesn't give up entirely.

[Orrex]

6. Jeez that sucks! I assure you that he has my sympathy!

My view is that schools that receive federal money should be required to meet with students in likely low-salary majors (the various Liberal Arts, for instance), and they should be advised that they'll be subjecting themselves to financial torture for at least 20 or 30 years.

Best of luck to your son! After he hits the lottery, maybe he can send a few $$$ my way!

[patrice]

7. Thanks for your compassion.

I stay close to him; we talk about what to do, how to live differently.

Although I'd love grand-children, I'm glad there are none involved, maybe someday . . . .

[EFerrari]

9. I wish something would happen. I want to go back for a year

for an MA in another discipline but gave up after looking at financing. It's impossible.

[No Elephants]

10. Oh, I like this a lot. $15 billion a year to banks to make loans, which is their business.. Nuts!

[hollowdweller]

11. NEVER understood the GSL system

When I was in school in the late 70's and early 80's I had a National Direct Student Loan, some grants and lots of financial aid. Then when Reagan came in a LOT of the free stuff was cut and the part I had to pay more than doubled. I got a Guaranteed Student Loan.

Never quite made sense to me that the gov't was essentially assuming all of the risk but not making the money off it.

After I graduated it was REAGANS AMERIKA and there were no jobs.

I had 2 college degrees but the only job I could find was as a donut fryer. My girlfriend, now my wife and I had been a couple for several years but we both were living at home with our parents because that was the only way that we could pay off our student loans. By having virtually no living expenses.

At that time there were a lot of defaults on student loans so we both wanted to pay them off so we would not be used as an excuse by the GOP to cut aid further.

In my opinion I just don't see that the so called "free market" is doing what it is supposed to do. I would lilke to see the gov't COMPETE with private industry in the areas of home loans, student loans, and health care. It's obvious that consiously or unconsciously the business community has sort of engaged in a collusion to sort of keep prices higher or obscure the details enough to where consumers cannot discern the best deals.

[surrealAmerican]

12. I was in school a few years after you, so ...

... it was bank loans guaranteed by the government. By the time I was paying them off, in the late 80's and 90's, they were being sold from bank to bank. Every year or so, I'd be paying back my loan to some other financial entity.

[surrealAmerican]

13. Very good!

This is the way it should be.

[InkAddict]

14. With degrees in Marketing, Hospitality, (BS) CS, and Health Info

(AS) you'd think there would be well-paying FT jobs so those loans could be repaid? NOT! The Marketer is on an IT Help Desk (where layoffs are increasing:scared:), the Health person thinks they got the last American transcription job (PT/no bene and soon to be outsourced/offshored :scared:) The other two can't find any work - Pay back loans? ROTFL.

Better BO keeps that revamping plan in storage until he gets jobs back in the US.