BS: Another Power Grab: Student Loans

Subject: BS: Another Power Grab: Student Loans
From: pdq
Date: 19 Sep 09 - 06:27 PM

House backs bill to overhaul student loan program

WASHINGTON (AP) — The House voted Thursday in favor of the biggest overhaul of college aid programs since their creation in the 1960s — a bill to oust private lenders from the student loan business and put the government in charge.

The vote was 253-171 in favor of a bill that fulfills nearly all of President Obama's campaign promises for higher education: The measure ends subsidies for private lenders, boosts Pell Grants for needy students and creates a grant program to improve community colleges, among other things. "These are reforms that have been talked about for years, but they're always blocked by special interests and their lobbyists," Obama said Thursday during a rally at the University of Maryland.

"Well, because you voted for change in November, we're going to bring change in the House of Representatives today," the president said.

Ending loan subsidies and turning control over to the government would save taxpayers an estimated $87 billion, according to the Congressional Budget Office. Lawmakers would use that money to help make college more affordable, increasing the maximum Pell Grant by $1,400 to $6,900 over the next decade.

"The choice before us is clear. We can either keep sending these subsidies to banks or we can start sending them directly to students," said the bill's sponsor, California Democratic Rep. George Miller, chairman of the House Education and Labor Committee.

Yet the money also would be spent on things that don't help pay for college, such as construction at K-12 schools and new preschool programs.

And while the measure would increase Pell Grants, it would do nothing to curb college costs, which rise much faster than Pell Grants do.

In addition, the CBO says that when administrative costs and market conditions are considered, the savings from switching to direct government lending could be much lower, $47 billion instead of $87 billion.

Republicans warned that instead of saving the government money, as Democrats promise, the bill could wind up costing the government more money.

"Unfortunately, the numbers just don't add up," said Minnesota Rep. John Kline, senior Republican on the Education Committee.

Lawmakers split largely along party lines on the bill, with only six Republicans in favor and three Democrats against. The measure goes next to the Senate, where its fate is a little less certain.

Obama didn't get his way on one thing: The president proposed earlier this year to take Pell Grants out of lawmakers' hands entirely, making the program an entitlement like Social Security and Medicare, which would have cost an estimated $117 billion — more than lawmakers have to spend.

Under the measure, Pell Grants would rise slightly more than inflation over the next decade, increasing on average about 2.6% yearly, according to the bill's sponsors. However, the grants would still depend on annual spending bills and could rise less than promised, as has happened in the past.

Lawmakers met Obama halfway on the labyrinthine college aid form; Obama proposed to eliminate it altogether when he ran for president, but the bill would keep the form and shorten it.

As consumers, college students probably wouldn't notice much difference in their loans, which they would get through their schools. However, officials at several colleges worry they may not be able to make the switch to direct government loans in time for next year, and Education Department officials said this week they do not intend to extend the deadline.

More schools administer federal loans through the subsidized loan program than from the government's direct loan program. Private lenders made $56 billion in government-backed loans to more than 6 million students last year, compared with $14 billion in direct loans from the government.

Republicans argued it is wrong to put the government in near-total control of student lending.

Many also worry about job losses in their districts. Private lenders employ more than 30,000 people whose jobs depend on the subsidized loan program, and the industry says many would be laid off.

Sallie Mae, the biggest student lender, has about 8,500 employees in the program and probably would lay off about 30% of those workers. It still will have contracts to service federal loans.

Its employees have held a series of town hall meetings and petition drives to involve local leaders in Pennsylvania, Florida, Delaware, New York and Indiana.

Democratic Rep. David Wu of Oregon said lenders still could make all the loans they want. "What will not happen anymore is making those student loans with taxpayer subsidies," he said.


Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Subject: RE: BS: Another Power Grab: Student Loans
From: Alice
Date: 19 Sep 09 - 06:31 PM

sigh
"power grab", ridiculous

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 19 Sep 09 - 06:35 PM

Sounds good to me. I don't think too many students would argue with it, either.

Subject: RE: BS: Another Power Grab: Student Loans
From: Amos
Date: 19 Sep 09 - 06:51 PM

What kind of paranoia is this? The government, paid to reorganize things so they run better, does so.

This is not a power grab, ding-dong. It is an elected government doing what it was hired for.

A

Subject: RE: BS: Another Power Grab: Student Loans
From: Sorcha
Date: 19 Sep 09 - 06:51 PM

Pell grants are GRANTS....NOT loans!

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 19 Sep 09 - 07:09 PM

"The measure ends subsidies for private lenders, boosts Pell Grants for needy students and creates a grant program to improve community colleges, among other things..."

Repeat: ends subsidies for private lenders. Increasing Pell Grants is only part of the bill.

Subject: RE: BS: Another Power Grab: Student Loans
From: Alice
Date: 19 Sep 09 - 07:15 PM

Yes, when I heard this news earlier this month I celebrated!
More people can be more educated. It's wonderful. It doesn't take a genius to understand that it was good to cut out the middle-man private lenders.

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 19 Sep 09 - 07:32 PM

"More people can be more educated. It's wonderful." ~ Alice

An unwarranted assumption.

First, it's the colleges and universities that do the education. Last time I heard they were pretty much fully utilized. We need to build more. Changing the student funding scheme does not fix the problem.

Second, somebody will have to do the paperwork. If the private lenders are elominated the colleges and universities will have to do it. Or the government will have to hire a number of people, perhaps the same size workforce as the private sector had.

Subject: RE: BS: Another Power Grab: Student Loans
From: Bill D
Date: 19 Sep 09 - 07:40 PM

"Republicans argued it is wrong to put the government in near-total control of student lending.

I'll bet they DID... the Republicans don't want anyone to get between them & their cash-cows. Loan companies, including those who have made student loans, are BIG business...and big business doesn't like regulation. It's the same basic attitude that the health-care powerhouses are showing...they want ALL transactions funneled thru THEIR systems, with as much control as possible over what fees they can charge and who they can decide to lend to...in other words, self-regulating of the skimming.

This bill still has to get through the Senate, and that's gonna be a lot harder, as way too many senators...even some Democrats... have taken way too many contributions from the aforementioned big business.

Subject: RE: BS: Another Power Grab: Student Loans
From: Bill D
Date: 19 Sep 09 - 07:45 PM

'...the government will have to hire a number of people,..."

maybe...maybe not...but controlling how much these 'administrators' and parper-work controllers are paid, and how much goes TO administration is the question.

Subject: RE: BS: Another Power Grab: Student Loans
From: Alice
Date: 19 Sep 09 - 08:16 PM

Just wondering... do any of those who complain about the government administering things ever use the public library?

----

and pdq, I'm not making "unwarranted assumptions".

Subject: RE: BS: Another Power Grab: Student Loans
From: Q (Frank Staplin)
Date: 19 Sep 09 - 08:17 PM

Now if the Senate will follow through.

I was lucky to have had the G.I. Bill (Servicemens Readjustment Act to pay my university education. The government agency and the schools did a damn good job of handling the payments. And initial housing help as well.
With that as the example, lets bring on more government agency administration.

Subject: RE: BS: Another Power Grab: Student Loans
From: Riginslinger
Date: 20 Sep 09 - 10:13 AM

Yeah, the best thing to do is to get the slimy banking industry out of student loans. They way students won't have to deal with them and the slime might not rub off on as many students.

Subject: RE: BS: Another Power Grab: Student Loans
From: Rapparee
Date: 20 Sep 09 - 10:31 AM

I went to college on the GOVERNMENT ADMINISTERED National Defense Student Loan Program (NDSL), as did most of my family and friends. We also received College WORK-Study grants (and we did work).

I know of no one, zip, nada, who did not repay their loan. Some repaid when the repayment was held up as they served in Vietnam -- they repaid with their lives or parts of their bodies and minds.

Having nieces and nephews who have dealt with the current system, I find it gouging, uncaring, and irresponsible.

Of course, back in the early Sixties there was a great value placed on education that I find sorely absent today.

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 20 Sep 09 - 12:17 PM

Republicans are values voters. The thing they value most is the almighty dollar, and their only purpose in life is to get moving to the top ten percent as fast as they possibly can.

Subject: RE: BS: Another Power Grab: Student Loans
From: Q (Frank Staplin)
Date: 20 Sep 09 - 01:58 PM

Nothing wrong with getting to the top ten percent- but getting there does not have to be built on the backs of the sick and the young. Many businesses and fortunes have been built without that.

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 20 Sep 09 - 02:01 PM

I left out one important word in my above post. I wasn't referring to them getting to the top ten percent. I was referring to them wanting all of the money getting to the top ten percent of people.

My post above should have looked like this...

Republicans are values voters. The thing they value most is the almighty dollar, and their only purpose in life is to get it moving to the top ten percent as fast as they possibly can.

Subject: RE: BS: Another Power Grab: Student Loans
From: Don Firth
Date: 20 Sep 09 - 02:49 PM

I don't know how in blazes people manage to get a higher education these days when tuition and books can run to tens of thousands of dollars a year. They start their careers deep in debt and often have to spend decades digging their way out from under student loans.

I entered the University of Washington right out of high school in fall of 1949, and tuition there was $53 a month. I think I spent about $25 on textbooks. I went for a couple of years, majoring in English (Literature and Creative Writing), then dropped out for a couple of years. I came back in 1956, changing my major to Music, and I think tuition had gone up to around $75 a quarter. Still do-able.

In the early 1960s, I entered the Cornish School of the Arts, a sort of conservatory, where I studied Music for two years. Cornish is a private school, and tuition was around $300 a quarter.

Hell's bells, these days I couldn't even take a single course in my local community college because the tuition is so egregiously high.

In many European countries, higher education is free.

"Greatest Country in the World" my south end!! We're way to hell and gone behind the rest of the civilized world!

Don Firth

Subject: RE: BS: Another Power Grab: Student Loans
From: Q (Frank Staplin)
Date: 20 Sep 09 - 02:49 PM

You are talking about 40 per cent of Americans. They are quite varied in their values.

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 20 Sep 09 - 02:53 PM

Anyone who claims that "all Republicans are..." is a bigot.

Subject: RE: BS: Another Power Grab: Student Loans
From: Q (Frank Staplin)
Date: 20 Sep 09 - 02:56 PM

That 40 percent Republicans could well be 60 percent 2012.

Subject: RE: BS: Another Power Grab: Student Loans
From: McGrath of Harlow
Date: 20 Sep 09 - 03:47 PM

ends subsidies for private lenders

I'd have assumed that would be something pdq would support.

Subject: RE: BS: Another Power Grab: Student Loans
From: Bill D
Date: 20 Sep 09 - 03:57 PM

My son has tried for several years to finish a degree at Towson U. in Maryland....he has 5 courses to go, and they say his eligibility for loans has ended.
   ONE of his textbooks has cost as much as my entire 1st semester in college did in 1957. Student housing is ghastly expensive, and tuition is worse. If we hadn't had much help from loans and some generous friends, he'd never have gotten this far.....right now we have no idea how & when he might be able to finish....he is working part time.

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 20 Sep 09 - 04:00 PM

Show me a Republican who isn't all about privatizing everything then, please, and maybe I'll rethink my position.

But make no mistake, anyone who is in favor of all goods and services being provided by the private sector, and making government so small it can be drowned in the bathtub is all about enriching the few at the expense of the many. There's nothing bigoted about saying that, either.

Subject: RE: BS: Another Power Grab: Student Loans
From: Stilly River Sage
Date: 20 Sep 09 - 04:09 PM

There was a big scandal a few years ago when it was revealed that the banks were making big kickbacks to university individuals who were channeling students to take the private school loans from their institutions. Heads rolled.

For a number of years, ever since the "reform" of the bankruptcy laws, every kind of expense can be adjudicated by a bankruptcy judge EXCEPT school loans. The banks know a cash cow when they see one and they put a lot of pressure on legislators to remove school loans from the whole bankruptcy discussion.

My daughter is in college, and the loans available are all through private for-profit banks. She gets Pell Grants, but they only help a little. The banks are all suggesting that parents go deep into debt to take out these "low interest" (ha!) loans to help their children--but guess what? If the parent declares bankruptcy, it is STILL a student loan and there is no mediation of that debt. We didn't bite, and though she has had to take a few loans, I think it is still under $10,000.

The White House is taking the lucrative subsidies and profits away from greedy private banks and that is what needs to be done. Just like earning profits on Health Care is an immoral form of profit for insurance companies, so is the profit these banks get in leveraging the future payments from today's college students.

There is a great deal of expansion room in the universities that are in my area. They can accommodate higher enrollment, and while many schools are building new up-to-date buildings to accommodate modern programs, this is for advanced research, it isn't always or even usually necessary for the undergrads entering the university today. Stifling the commercial banks in no way stifles the universities they hover around.

SRS

Subject: RE: BS: Another Power Grab: Student Loans
From: Tinker
Date: 20 Sep 09 - 04:12 PM

The current loan system is broken. My daughter who was able to take out her own loan last year to help defray costs has "insufficient credit history" this year with the same bank.

The private banks want every kid to have a co-signer so there is zero risk to the bank. When you add the annual cost to the for profit system the numbers multiply to obsene levels very quickly.

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 20 Sep 09 - 04:26 PM

As usual, people look at any discussion and see their pet peeves. So be it.

I think this bill is a huge mistake because it reduces the number of sources of loan money for students.

We need more money for higher education and more sources for student loans. More options, more new college construction, and stricter standards for college entry. Those who cannot compete should go to trade schools.

Subject: RE: BS: Another Power Grab: Student Loans
From: Rapparee
Date: 20 Sep 09 - 07:11 PM

Are you saying that there is something "underclass" or "lower class" about "trade schools???"

In 2008 China graduated 120,000 engineers; the US graduated 60,000 (source: Jim Risch, my Republican senator). The per-capita doesn't matter one damn -- the US is falling far, far behind. India has already caught up with China in the number of engineering graduates.

Consider further education: Mandarin or Gujarati might be appropriate.

Subject: RE: BS: Another Power Grab: Student Loans
From: Janie
Date: 20 Sep 09 - 07:28 PM

As Sorcha noted, PELL Grants are not loans. They are need-based grants to help low-income students pay for higher education.

There was never any good reason for a private lending institution to be involved with administering them.

Subject: RE: BS: Another Power Grab: Student Loans
From: Janie
Date: 20 Sep 09 - 07:45 PM

And I am not sure that private lending institutions were ever involved with administering PELL grants.

The article that pdq posted lacks any sufficient detail on which one could possibly draw any informed conclusions, regardless of one's sociopolitical paradigm. The only thing that I can surmise from the article is that the House passed a bill that makes changes in federally funded, subsidized, or guaranteed loan programs and grants-in-aid that may affect both how at least some of the assorted programs are administered, the amount of grant-in-aid money that may be available to some students, and the total funding package includes funding that goes to the educational system, without specifying what, in addition to affecting student loans and grants-in-aid.

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 20 Sep 09 - 07:46 PM

[...from a college website. Please show where those big bad banker types are involved?]

What Exactly Is a Pell Grant?

Federal Program Offers Another Source of Financing for Students

One of the numerous potential sources of financial aid for college students is a Federal Pell Grant. This grant is a form of need-based financial aid, and unlike a loan, the money does not have to be repaid. Eligible students receive a specified amount each year under this program.

Eligibility
The U.S. Department of Education uses a standard formula to evaluate the information a student supplies when applying for a Pell Grant. This formula produces an Expected Family Contribution (EFC) number, which will determine if the student is eligible for the grant. Applicants must be undergraduate students who have not earned a bachelor's degree. Each applicant must be a U.S. citizen, or an eligible noncitizen, and needs to have a high school diploma or a GED or to demonstrate the ability to benefit from the program.

Award Amount
The maximum Pell Grant for the 2009–10 award year is $5,350. The amount of the grant depends on both the student's EFC and several other factors. These factors are the student's cost of attendance (tuition and fees, room and board, books, supplies, and so on) and the amount of time the student attends school (whether the student goes to school for a full academic year or less and whether the student is full-time or part-time). An eligible part-time student can receive a Pell Grant. The amount awarded, however, will be less than for a full-time student. An applicant may receive only one Pell Grant in an award year and may not receive Pell Grant funds from more than one school at a time.

Disbursement
A school may credit Pell Grant funds to a student's school account, pay the student directly (usually by check), or use a combination of these two methods. The school must notify the student in writing of the amount of the Pell Grant, and of how and when payments will be made. Schools must pay at least once per term, whether that is a semester, trimester, or quarter. Schools that don't use formally defined, traditional terms must pay the student at least twice per academic year.

Time Limit
Students who received their first Pell Grant on or after July 1, 2008 are limited to 18 semesters, or their equivalent, of Pell Grants. Students can receive up to two Pell Grants in one award year if they wish to accelerate their course work.

How and When to Apply
Students apply for not only Pell Grants but all federal, state, and some institutional financial aid programs by completing the Free Application for Federal Student Aid (FAFSA). The paper FAFSA is available from high school guidance offices, or may be completed online at www.fafsa.ed.gov. Students should check with their chosen institution to find out the college's preferred filing deadline for the FAFSA.

Subject: RE: BS: Another Power Grab: Student Loans
From: Janie
Date: 20 Sep 09 - 07:47 PM

We cross posted, pdq.

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 20 Sep 09 - 07:52 PM

Yes we did, Janie.

Always good to see your open-mindedness.

This country has never been more divided, at least not since the Civil War.

Any discussion involving facts and not venom is appreciated.

Subject: RE: BS: Another Power Grab: Student Loans
From: Janie
Date: 20 Sep 09 - 08:03 PM

Keep in mind, pdq, reactionary posts are going to tend to draw reactionary responses.

I think you are aware of that, and knew exactly what kind of response/reaction you were going to get. The article does not provide sufficient information to warrant a conclusion that it represents "another power grab," either.

Subject: RE: BS: Another Power Grab: Student Loans
From: Janie
Date: 20 Sep 09 - 08:37 PM

I was fortunate to be able to avoid student loans for both undergrad. and graduate school, mostly because for the last 80 hours of undergrad., I took courses at night and worked full-time (took me 11 years to finish, though,). I worked throughout my college careers, sometimes workstudy, and sometimes waitressing or as an attendant to a fellow student who was confined to a wheelchair. The first two years of college, when I went fulltime and lived on campus, I turned my paychecks from summer jobs over to my dad, who banked them and used them to defray part of the cost of the dorm and cafeteria fees. I was self-employed during graduate school so could work nights and weekends, and attend classes and internships during the day. Didn't get much sleep, but also didn't have any loans to pay back. My parents and father-in-law chipped in and paid my graduate tuition and helped some with the cost of books. The tuition for graduate school per semester in '90-'92 was about 3 times the cost of a semester's dorm and cafeteria bill '69-'71. The tuition for graduate school was 11 times what undergrad tuition was '69-'71.

I don't know what it is like in other places, but where I have lived in North Carolina for the past 23 years, people with college and post graduate degrees are a dime a dozen, and an undergraduate degree is absolutely no guarantee of a job, much less a job that will pay enough to cover living expenses and pay back of student loans, given how high the amount borrowed has to be to finance higher education. (There are some exceptions, especially medical, dental and law degrees.) I do not think one can anymore assume that borrowing money to attend college is a sound financial decision. I know too many out-of-work teachers, people in assorted computer and IT related fields, social workers, etc., or people with undergraduate degrees in a broad range of fields who borrowed money and are employed as receptionists, customer service reps, etc. making much lower salaries than they anticipated, and struggling to pay back student loans.

Subject: RE: BS: Another Power Grab: Student Loans
From: Riginslinger
Date: 20 Sep 09 - 09:21 PM

"Nothing wrong with getting to the top ten percent- but getting there does not have to be built on the backs of the sick and the young. Many businesses and fortunes have been built without that."

               But most of them have been.


               My son just paid $85.00 for a text book--that is, he didn't have the money and I paid $85.00 for a text book.

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 20 Sep 09 - 11:42 PM

The program isn't just Pell Grants. According to what I read in the excerpt posted, it also includes direct government loans.

Subject: RE: BS: Another Power Grab: Student Loans
From: Barry Finn
Date: 21 Sep 09 - 01:15 AM

Pell Grants aren't loans
I got pell grants for my kjds but if you think they helped all that much take a gander at what they give & then see what college costs are, not even close. For my daughter hers didn't even cover the costs of food on campus.

Both on mine not only needed the pell grants & got them but they also needed sub & unsub loans, which wasn't even close to what was needed. We had to beg borrow & steal & it's still nearly driving us under the poor house. Education should be a right & not a private privilege for just a few classes.

The military gets many of our young because they cannot afford to attend college & jobs are hard to come by for those at that age who don't have a great education.

"I think this bill is a huge mistake because it reduces the number of sources of loan money for students"

Ddq, that's because every privite for profit banking & lending instutition has they're paws on it & are they don't want to lose the hand over fist profits that keep rolling in the door. If the governemt ends up dealing out the money that would deeply cut into the beef of the cash cows wouldn't it. And as mentioned above the government did a great job educating it's vets under the GI bill until some assholes got into it & diluted & watered it down.

Barry

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 21 Sep 09 - 01:35 AM

It's not just Pell Grants. It's also direct government loans, which are not grants. It says so in the article.

Subject: RE: BS: Another Power Grab: Student Loans
From: Donuel
Date: 21 Sep 09 - 10:12 AM

What started out as State goverment student loans got privatized 30 years ago.

Privatized student loan banks do this...

First they churn the loan by selling it on paper back and forth between2 or more banks in collusion with one another.

They charge extra fees everytime the loan is transferred and compound the interest until they get a huge amount.

I owed $320 dollars on my NYSSMA student loan.   I moved and lost the address for payments. The next time I caught up with them the amount was increased to $62,000

A law was passed so that they got their money directly from the IRS by removing any refunds or stimulus money and putting it in the banks account.

This power grab by the banks is one of their most profitable scams.

The Goverment will mediate these loans so that people can at least redress their grievences against what amounts to these banking crimes.

Subject: RE: BS: Another Power Grab: Student Loans
From: Rapparee
Date: 21 Sep 09 - 10:27 AM

My niece borrowed at TOTAL of $23,000 for college -- most of her costs were paid by working, saving, and scholarships, but they weren't quite enough for the four years. Please note that this is a tiny amount compared to the total cost of college these days.

She recently worked out that between banks selling her loans and varying interest rates she will have paid $137,000 for borrowing that money. Her father and uncles borrowed also; we paid 3% interest and paid the NDSL program.

You do the math.

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 21 Sep 09 - 11:02 AM

I looked at a few college loan websites and it appears that the interest rates from privates banks run about 2.5% to 4%. No payments at all until after graduation.

I don't see how that can be called "obscene profit" or a "cash cow for all those gready 'publicans".

The $23.000 loan mentioned above would result in about $50 dollars per month payments at 2.5% interest.

The current situation in mortgage money shows that 90% of the money comes from institutions that were either created by the federal government or are now owned by it. This move to end the federally subsidized student loan system will probably result in about the same percent of higher education money being directly dispursed by the federal bureaucracy: over 90%.

Those who control the money control everything. A "power grab" it is.

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 21 Sep 09 - 11:41 AM

So by that equation, the banks controlled everything before. Considering the track record of banks in the US lately, grabbing power from them is probably a very good idea.

Subject: RE: BS: Another Power Grab: Student Loans
From: pdq
Date: 21 Sep 09 - 11:59 AM

"So by that equation, the banks controlled everything before. ~ Carol C

Absurd conclusion.

The federally-controlled financial institutions handled the majority of single family mortgage money before the housing market collapse. Their market manipulation caused the problem, not private banks acting in a free market.

The collapse pushed the federal share from about 50% to over 90%. That is not by accident.

Subject: RE: BS: Another Power Grab: Student Loans
From: CarolC
Date: 21 Sep 09 - 12:22 PM

So the government controlled the money before? So then this move is not a power grab.

Subject: RE: BS: Another Power Grab: Student Loans
From: dick greenhaus
Date: 21 Sep 09 - 12:30 PM

Not sure what the fuss is about--the Feds guarantee the loans, so that the bankers grab a hefty profit for making loans with no risks attached. Cutting out the middle man can only be beneficial to the students and the taxpayers. The bankers? Mebbe not.

Subject: RE: BS: Another Power Grab: Student Loans
From: Rapparee
Date: 21 Sep 09 - 12:59 PM

Freddie Mac (Federal Mortgage Assurance Corporation) has had a few problems in the very recent past.

Sallie Mae (NYSE: SLM) has had a few as well. This list (from Wikipedia) is not current:

On November 9, 2005, former Sallie Mae employee Michael Zahara filed a federal lawsuit against the company, alleging that it had a pattern and practice of granting forbearance in a purposeful effort to increase total student loan debt. That lawsuit is still ongoing.[9] On October 29, 2008, permission was granted to his legal counsel to withdraw from the case, citing "From counsel's perspective, a breakdown in trust has resulted from the discovery that Relator has been arrested for extortion, the circumstances surrounding that arrest, and Relator's failure to disclose the arrest to counsel."[10][11]

A 60 Minutes segment (originally aired May 7, 2006) examined Sallie Mae, including its business practices.[5] A professor of law at Harvard Law School, Elizabeth Warren, who is also an expert on bankruptcy and an outspoken critic of consumer lenders, questions Sallie Mae's dual role as both lender and collector.[12]

In February, 2007, New York Attorney General Andrew Cuomo launched an investigation into alleged deceptive lending practices by student loan providers, including The College Board, EduCap, Nelnet, Citibank, and Sallie Mae.[6] On April 11, 2007, Cuomo ended his investigation of Sallie Mae and announced that Sallie Mae had voluntarily agreed to change its lending standards to satisfy a new code of conduct for student loan practices established by Cuomo, and to donate $2 million (USD) to a fund devoted to educating college-bound students about their loan options.[13]

On October 10, 2007, documents surfaced showing that Sallie Mae was attempting to use the Freedom of Information Act to force colleges to turn over students' personal information.[14] The university involved, the State University of New York system, is expected to decline the request and be forced to defend its position in court.

In December 2007, a class action lawsuit was brought against Sallie Mae, alleging that the company discriminates against African American and Hispanic private student loan applicants by charging them high interest rates and fees. The lawsuit also alleges that Sallie Mae fails to properly disclose private student loan terms to unsuspecting students. The lawsuit is pending in a Connecticut Federal Court.[15] New York Attorney General, Andrew Cuomo, raised similar concerns about possible student loan redlining in June 2007. [16]

On December 19, 2007, Chairman Al Lord acted out in frustration during an earnings call with analysts, he ended the call with "There are no more questions. Let's get the fuck out of here." Sallie Mae's stock price fell 21% that day.[17]

I leave you all to research SLM further.