President Obama has a plan to move our money from banks to students.
Every year, taxpayers subsidize student loans to the tune of $9 billion. Banks service these loans, collect the debt, keep the interest, and turn a profit. When borrowers default on their loans, taxpayers foot the bill, and banks still reap the interest.
It's a great deal for banks and a terrible one for taxpayers.
The president's student aid reform plan will save tens of billions over the next decade. We'll use these savings to make college more affordable for the next generation of engineers, teachers, and scientists who will become the backbone of the new economy.
The House has passed the Student Aid and Fiscal Responsibility Act. This legislation will end bank subsidies and invest in students directly. The Senate is still working on its bill.
The House bill will increase Pell Grant scholarships to $5,710 in the next fiscal year. It will guarantee that Pell Grants keep pace with the rate of inflation. It will eliminate unnecessary questions from the financial aid forms, making it faster and easier for students to qualify for federal grants and loans.
This legislation also promises an historic investment in community colleges, helping these essential schools take Americans from all backgrounds and equip them to succeed. Finally, it will improve the quality of early learning programs, which are critical to America's educational success.
All of this will be possible by eliminating the student loan subsidies. We will end the loans under the Federal Family Education Program and make them directly to students -- just as economist Milton Friedman proposed 50 years ago, and just as the Department of Education has been doing since 1993 through the Direct Loan Program.
For future lending, we have hired experienced companies to service all new student loans and collect them for us. We selected these companies through a competitive process.
The shift is underway, and it is proving to be a remarkably smooth transition. In the past two years, our Department has issued more than $50 billion in student loans. Over 2,300 colleges and universities participate in the direct lending program -- an increase of 1,300 over the past three years.
It's time to do what's right for taxpayers -- move our money from bankers to students.
Todd Sussman: College Debt: Where's Our Bailout?
I know there has been talk in Washington about helping us "student debt-drowners," but I watch politics go on as usual and it leads me to believe that there will be no help for thousands like me. Where's our bailout?
Arne Duncan, U.S. Secretary of Education -- Biography
What Arne Duncan Thinks of No Child Left Behind - US News and ...
Layoffs loom for teachers: education secretary
If education spending is out of control and needs to be reigned in, why not start at a place that is low hanging fruit--the place where big money is sucked out of the system for questionable profits. Then we can start going after overpaid administrators, professors, building programs, etc.
With education, we have 50% drop-out (before graduation). In large cities it's 70% drop-out. The RI school district in the news, it was a 93% failure rate.
There was a SYSTEM failure STARTED more than a decade ago. We got progressive-sounding papers from gurus on education. We "reformed" the system. Yet education in the US and across the world that stayed with an OLD educational system (developed over generations) far surpassed us. We made excuses and come-up with cliches why we were still better and testing is such a terrible idea.
It's time we thought out-of-the-box. Following what other countries are doing including Korea, Japan, China, India may not hurt. Perhaps we should shake the system with a 20% funding-cut; eliminate half if not more of the 20-year veterans, who are likely too-ingrained with the current system and the top teachers union brass. The fresh start and fresh blood will get people thinking afresh.
Just my view. What do I know about education? The experts like teachers in RI blame the transients, immigrants and the poor. Yet where I live recent immigrants from war-torn Bosnia and Burma are doing much better than the average, with a greater desire to succeed, even with less fluency in English.
No, we haven't reformed the system of education. All we did with the Republicans was cut funding and cut funding. Then under Bush the Republicans instituted the idiotic No Child Left Behind which forced the whole nation to take stupid tests that have never measured anything, and punished whole schools if the students failed to improve on these meaningless measurements. Yes, testing is a terrible idea. Because of Bush we test and test and test and test. Your idea of 20% funding cut would destroy an already ruined system. Cutting 1/2 the veteran teachers is another bad idea. New teachers have energy but little experience. If you want people thinking afresh, get rid of No Child Left Behind and get rid of Obama's Race to the Top, another program which will have little impact but make a bad situation worse. Then we need to start funding teachers and public schools adequetely.
Since 1985:
Energy costs - 108% increase
Health Care costs - 251% increase
COLLEGE TUITION - 439% increase
http://money.cnn.com/2008/08/20/pf/college/college_price.moneymag/index.htm?postversion=2008082214
America is the Best? - see
http://www.woosk.com/2010/02/america-is-the-best-dammit.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Woosk+%28Woosk%29&utm_content=Google+Reader
Government is stuffed full of blithering idiots that forget that the "Global Economy" was set up by big business as a source of cheap labor to benefit the few !
Won't talk loans, but will say it was a way out of working class poor.
For the past 14 years, I have worked as a professional astrologer, so I consider I have an advanced degree as well.
Just, cosigning self-study, having taught myself astrology & other forms of metaphysics.
Appaud you, realitytrumpsbull.
Why is this any different than the housing fiasco? Give people unfettered access to credit, then give them a way to spend it, then saddle them with loans they have no hope of ever paying.
The only way out of this mess is through the American economy being able to grow and provide high wages through innovation and productivity.
However, Democrats and Obama are doing everything possible to drag business down.
And again, jabailo, you are right. No person should have access to unfettered credit. On'y banks should have this unfettered access! To bailouts, that is. After all, credit is for little people, right? (Oh, those corporations! They sure do love socialism, huh! )
As for the economy growing and providing high wages through innovation and productivity, why ...
no no no. You messed up here.
Come on. Shareholders do NOT want to pay high wages. So, corporations outsource the manufacturing of innovation. (Or destroy it ... but that is a different story). In any event, this outsourcing keeps the American workers poor. I mean, get with the program! See, by outsourcing everything, American workers are kept poor. So, then we can bail out thebanks. And yell at the poor who, apparently, have access to unfetter credit.
Whew! This es sooo complicated.
Much better to have the CEO types in charge.
We teacher educator types are feeling it too.
Let me take a line directly from the columns..
"When borrowers default on their loans, taxpayers foot the bill, and banks still reap the interest."
Soooo, how will the govt taking this over result in the taxpayer NOT having to pay for the defaulted loans? HOW? Is making more money available to students, many of whom will NOT finish college for a number of reasons, thru grants somehow NOT a waste of taxpayer money when they don't graduate? A loan puts a REASON for these students to finish what they started, and to honor their obligations in paying that loan back. Oh, the EEEEEvil in someone making a profit from the risk they take with their assets in the first place! Geezz, I fear for this nation's future with this bunch of whining incompetents populating the colleges nowdays!
I've heard of "evil insurance companies" and "big oil" but why do we ignore college?
Since 1985:
Energy costs - 108% increase
Health Care costs - 251% increase
COLLEGE TUITION - 439% increase
http://money.cnn.com/2008/08/20/pf/college/college_price.moneymag/index.htm?postversion=2008082214