Yet Another Government Takeover: Student Loan Edition
by Rep. Cathy McMorris Rodgers (R-WA)This week will be a defining moment for Congress and our country. As Democratic leaders map out their health care end game, we as elected officials have a choice to make: Will people control their lives, or will government?
The stakes of the health care debate are clear. On the table is a bill that would put the federal government in charge of one-sixth of the American economy and, perhaps even more stunningly, the way Americans get medical care. Yet far too few Americans realize there is another government takeover in the offing – this one in how Americans pay for college.
First, some history. Since 1965, the Federal Family Education Loan Program has helped tens of millions of students and parents by providing low-cost, federally guaranteed loans. This public-private partnership offers students and schools choice and competition among loan providers, as well as essential value-added benefits such as college outreach, debt management and financial literacy.
For these reasons, FFELP has consistently been the more popular choice among colleges and universities. It leverages the innovation and competitive forces of the private sector with congressionally mandated benefits and protections that keep interest rates and fees low.
Yet right now, the Majority in Congress and the President want to make it more difficult to pay for college by putting the government between you and the money you need to pay for higher education.
The Administration wants to end FFELP in favor of a 100 percent Direct Loan program. Under this approach, the federal government will become the sole originator and collector of student loans, forcing the roughly 4,000 schools who have chosen FFELP to the government-run alternative.
Stunningly, they plan to perpetrate this government takeover by quietly tucking it into the infamous health care plan now careening toward a final vote. It is the culmination of nearly two decades of Democratic plotting to crowd out the private sector and federalize approximately $100 billion in annual borrowing.
In an ironic twist, the Direct Loan program was first conceived as a “government option” rather than a complete government takeover. For a decade and a half, the government-run Direct Loan program was available to schools as an option, alongside FFELP. Not surprisingly, schools voted with their feet – roughly four out of five colleges in America have consistently chosen FFELP.
Not satisfied with the unpopularity of the Direct Loan government option, Democrats have now decided to make it the only option for colleges and their students. The relentless pursuit of a government option for health care was a transparent attempt to do to medicine what Democrats are now doing to student lending: putting bureaucrats in charge over the wishes of the American people.
Until the global credit markets collapsed, FFELP loans were financed exclusively with private sector capital. Congress has temporarily injected federal funding and purchase agreements to cover a portion of FFELP originations in the current economic downturn, but when the economy recovers, there is no reason the FFELP could not return to a model that leverages private capital to finance the largest single source of student financial aid.
In contrast, Direct Loans are financed with Treasury borrowing. This poses a risk for taxpayers and places a stunning amount of long-term debt on the books at a time when America is borrowing more than ever from China and our other foreign creditors. If the Majority has its way and ends FFELP in favor of a government-run lending scheme, the Department of Education will become one of the country’s largest banks—originating more than $100 billion in federal student loans each year.
During these tough economic times, we should be doing everything we can to make education more accessible. Ending a proven, and successful, student loan system in favor of a one-size-fits-all government program only will make it more difficult for American students to receive a 21st century education, ultimately putting our nation at a competitive disadvantage. The Democrats’ thirst for a bigger, more intrusive federal government is putting both health care and college lending at risk. What’s next?
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464 Comments
Can you say Socailis-M……
WTF does this have to do with Hethcare ???? why is it in the same bill? Why can't any freaking congressmen see this and vote no for this reason alone !!!!!
Rep. McMorris Rodgers,
Do you realize that WE, the People are fed up?
WE, aren't going to take it anymore. We are simply going to lay down and quit.
You all, our elected leadership have abdicated your collective responsibilities. This just might be the straw that breaks the camels back.
" What’s next? "
Tune in tomorrow.
Just like when FDR over-stepped the Constitution, the Supreme Court has got to rein in BHO and his ilk. If only as a stop-gap measure until Nov. 2nd.
Lay siege to Washington DC on April 15th!
Be prepared to take over the capitol for weeks and stand fast against the tyranny to come!
The sooner the 7 of us that still have a job stop paying Federal Withholding taxes…the better.
It's much more satisfying to send them a check on tax day than it is to wait for them to give me back the interest free loan I gave them.
Plus, that way they don't get my money until it's due.
Not much you can do about SS and Medicare taxes, but paying witholding is purely voluntary.
With all these programs that they are putting into place, how is anyone going to be able to live? TAX TAX TAX is all I see anymore. Wasn't this country partially founded on the fact that people fled because they didn't want to pay all of those taxes?
Sure.
Government monopolies have been nothing but successful as history has shown.
As evidence I submit the Post Office and "Ma Bell."
Chicago/Venezuelan style means they'll use health care and student loans as other types of rewards to citizens in the new patronage system being set up to gain control over our lives. This is what they do in Latin dictatorships and what they are doing here.
Want a student loan and acceptance to college? Show me your union card. Want a kidney transplant? Show me your party affiliation. Want a mortgage to buy a house? Ask speaker Pelosi for permission. Need a job? That's what government is for, they're the only ones hiring.
"It's much more satisfying to send them a check on tax day than it is to wait for them to give me back the interest free loan I gave them.
Plus, that way they don't get my money until it's due."
Now your talking, Spliff. I could never figure out how people could be so stupid as to give the government an interest free loan year after year after year.
Congrats on "getting it".
Who are you and what have you done with anon?
'you cannot control the populace until you control the children'…
Hitler, Stalin, Mao- now Penn's good pal Chavez- all said the same. By taking kids from their parents and making them beholding to the State you will have good, compliant, and unquestioning robots.
Which is EXACTLY what they want here…
If you don't pay what they deem is enough throughout the year then they hit you with the "Alternative Minimum Tax" (yes we are the ATM for the government….)
Not quite. That's based on deductions vs income.
I have missed your input.
Where have you been?
Because the "freaking congressmen" want that too. It's actually a sweetener for most of them.
We are struggling to pay for a college education, but we will never borrow money from the government to pay for it. Obama has said in the past that some sort of service should be attached to a student loan. Trust the government with something that personal? No thanks.
What does healthcare have to do with healthcare?
The reason it's in the bill is because the bill is about control, not health or costs or anything else.
It's about control, and if they can pack as much Gov't centralization crap as they can in this bill, they will.
Problem is that this will kill the CBO score and reconciliation can't happen if the bill doesn't reduce the deficit.
They have to sweetening it for the congress to vote YES on this for OBLABLA care… I would say that DEAD FISH Rahm is behind this……
My friend's dad just bought a real nice 3-bdrm, 2-bath house in a gated community in Ecuador with a 100 year lease. He has a maid and a 180 foot length of beachfront that is his. Said he paid about $160,000 and the living is cheap.
There are still places to go when your country has been taken over by the enemy.
Or, you can sit around and reload ammo like I do.
As others have said, this is nothing more than another gov't power grab. Since they already have the auto companies, banks, soon insurance and possible student loans, there isnt much left the gov't doesnt control or hasnt controled yet. Besides, can anyone thing of a gov't entitlement program that isnt in the red and isnt full of corruption and fraud.
One thing I wonder about the liberals/progressives is why they think the gov't must make desicions for the people instead of the people themselves? Reason I ask is that I dont know what the progressives themselves on here actually want beyond the obvious power grab.
When government "provides" the money, government makes the rules. I predict a tax revolt is coming.
Control everything. Control, news, healthcare, education, every aspect of your lives controlled by Nancy Pelosi and the good comrades down at central planning.
LOL My thought exactly.
With the private sector under sustained attack by the progressives what need will there be for people with advanced educations? Push carts don't require a degree.
The Gov't can only provide someone with a dollar by first TAKING it from someone else.
Why progressives ignore this reality is beyond me.
Government is BROKE! I want my money back!
Maybe we can just put our tax money into an escrow account until the government starts working for us again. That way we'll have something to hold over their heads. I'm starting to think they're not scared of us, nor scared of losing their jobs when they get voted out.
If you were right, (and I'm not saying you are) then Obama could simply call for real reform and tighten the rules on student loans. He's not, so how can you say it is about the money going to his banks?
[...] » Yet Another Government Takeover: Student Loan Edition – Big Government. Easy AdSenser by Unreal [...]
If the government takes over student loans, would there be any chance a student would be required to volunteer a set number of hours, days or years to a community organization before being approved for or continuing to receive a college loan? YES, just wait and see!!! BHO will fundamentally transform the student loan program too.
The government can only provide someone with a dollar by first TAKING it from someone else.
Why progressives ignore this reality is beyond me.
Oh wait, nevermind, the only way they got into power is by lying about it. Remember the lady in Detroit getting herself some "Obama money"?
The reporter asked here where it came from…she said, "I don't know, Obama's stash?" And proceeded to chant further proving that Democrat Plantation Politics have worked perfectly.
The AMT is not adjusted for inflation, so it's getting pretty bad for upper middle class families.
I have one brother that got nailed with it last year, and it's a whopper.
I'm thinking we follow the Honduran model.
First we replace congress. Next we work through Congress and the Supreme Court to demand the removal of the president on the basis of violence against the Constitution. I relish the idea of our military flying our traitor-in-chief off to a "neutral" country.
When was the last time the left was accountable? God you lefties are stupid. America really is getting tired of the pathological liars syndrome.
To me it appears that Obama is working to set up a caliphate from the white house.
No checks on power, no constitutional limits, or a meaningful constitution either. The bowing to the Saudi King (and florida mayor) to show deference. The Cairo speech to let muslims know where his loyalty is. This is not accidental. He is systematically destroying our way of life.
Tea party members are our best hope right now. The republican leadership has missed the boat, no wonder we fired so many of them the last couple of election cycles.
away, friend…
But glad to be back in the mix! It must be lonely holding up the fort; but one suspects you have done yeoman work cuffing the louts about the face and neck. Noticed even many of the trolls have gone underground- your
work as well?
'Light the fires and kick the tires' as our fastmover friends say…
Yes. It hurts because it basically says, "I don't care that you had to pay all this money out that is actually deductable on your taxes, you will pay us what we tell you or go to jail."
We all do our part. But he's fun to watch in action!
They don't know how to run anything. They just want it.
Then it all slowly crumbles around them, and they starting looking for someone to blame.
as all good Cowboys (and perhaps some Rangers) do he accepts no nonsense and takes NO prisoners. All good things…
Since he's not a powerful liberal in the DC beltway, he couldn't pull a Tim Geitner either. He had to actually pay his taxes.
Glenn Beck said something interesting and I've been entertaining the thought – that we should, en masse, go to our representative's local office and sit down and refuse to move. I wonder what would happen if this happened all over the land…
The real trouble is that gov't has so many ways of "taking" those dollars. Like flooding the economy with newly printed dollars that devalues the currency. So even if you keep the $100 in your wallet, it's only worth $50. Ironically, it's the poor, the welfare recipient, and the mindless "progressives" that are raped first.
"Not much you can do about SS and Medicare taxes"
Yes there is. Go into business for yourself. It's the American way.
Then you pay quarterly and you are only required to pay what you actually owe. And yes there is a penalty for underestimating but as long as you paid in as much as the previous year you are covered.
I've been doing it for 27 years. I've never got a refund.
The lines are burning up again today. We need to surround their home offices and the capitol bldg. Let them hear us loud and clear. The trouble is if you're outside their districts they are NOT tallying your objection to the health care…go figure…
He didn't blame it on Turbo Tax? It's foolproof!
So why, genius, is it in the health bill? Why were the panels that would regulate who gets what in the health care bill in the stimulus bill?
You need to get past the labels and actually do some homework. You sound very young – do you realize that this will affect you much more than it will affect me? And, if you're not very young, then you are a moron.
That'd be interesting.
Akin to the "lunch counter sit-in's" from the Civil Rights era of the 60's.
Instead, this time, there will be no free lunch.
"We are struggling to pay for a college education, but we will never borrow money from the government to pay for it."
That's your choice and no one is ever going to take it away from you. Do you have a problem borrowing from a private lender where the government guarantees payment. In other words, a government subsidized risk that benefits you with a lower rate?
All of that sounds well and good…except when you have employees.
You have to match their contribution.
Self-employed have to pay the full 12.4%. Employees only pay half, their employer matches that half.
I pay 6.2% SS taxes. You pay 12.4%
You're getting hosed.
me, too!
Not sure, but I know that if you don't want to pay back your loans, work for Gov't.
It's all a ploy to grow the Gov't ranks even more than they already are.
That's their plan.
Evidently it's a 'progressive elite approved' excuse, he still got senate confirmation.
therefore, shoveling troll manure is easy cheese… makes sense. But to do it with savoir faire' and aplomb-
THAT's a different thing altogether!
I'm afraid it's going to take some time there anon,…. you must realize that,……..
you did dig yourself into a pretty deep hole,…….hopefully,…..with this comment of yours,…….
you at least thought about putting the shovel down. …..good luck.
Except in CA, we won't be able to legally reload ammo soon.
After getting control of student loans, and the federal government controling primary schooling textbooks in all 50 states, they then want to put Americorp in all schools to " mentor " the school kids. Here is a segment form PBS shown in South Florida. It is Issue Two : Education reform through Community Service Organizations. http://channel2.typepad.com/issues/
More and more I am coming to the conclusion that the true root of this evil is the unions. There is no need for them. There are more worker protection laws now than anyone can even keep track of. They are simply a taxpayer funded PAC for Dems. Everything you see happening is the pay back to unions.
If there were any doubts about Obama being a socialist and launching a federal takeover of the private economy, this should put them all to rest.
Yeah, that's pretty funny. Arnold is a Failure. And to think there was talk about changing the Constitution to allow him to run for President.
I wonder just how many drug dealers and gang bangers get their ammo mail order from Cabela's. Luckily you can still buy your ammo out on the streets without having to provide a thumb print.
It would be a good time to go into business doing mail order ammo sales in Yuma. It's only a short hop from California.
One only need visit opensecrets.org to see that the largest and three out of the ten biggest donors to the obummer campaign are schools of higher learning that will DIRECTLY benefit from such legislation. Accountability is being stripped from students and their families and being levied upon every citizen who pays taxes, which unfortuntaely make up less than half the population. Obummers furthering the thougths to limit how much students pay for tuition independent of what the college they attend charges. In essence the taxpayers will make up the difference between a stripped toyota and a loaded audi for students. Thats their entitlement right according to obummer and his complacent minions. We don't need 'change', we need a restoration of self accountability. The rewards of frugal behavior and smart risk taking at the personal level are consistent with the right to pursue happiness, while overspending and dangerous risk taking, while a personal right in the pursuit of happiness will yield personal, not national indebtedness and bankruptcy.
Did you even READ the post? That's what they are TAKING AWAY!!!
I heard that if you take a gov loan to go too school, after you graduate if you get a job in the PRIVATE market you have to pay the loan back but if you get a job with the government they will just write it off!
Nice huh!!!
Obammy is SCARY!!!!!!
If you know anyone within earshot of Washington call them ASAP!
Tell them to be there by Saturday and share this message with EVERYONE you can!
I'd suggest that ANON is the one that doesn't "get it." The left's notion that direct lending "saves money" is a false one- since it's inception during the Clinton Administration direct lending (FDLP) has lost money each and every year; the money repaid by student borrowers has not covered the costs of borrowing money from the Treasury. Currently FDLP is over $16 billion in the red. As former Federal Reserve governor and one time direct lending supporter put it almost six years ago, "leave it to the government to lose money on a sure thing". http://www.aei.org/article/20521 Those losses will increase exponentially if the competing FFELP is shut down. Each dollar borrowed from the Treasury is another dollar added to the national debt. One other thing- the Federal government does NOT have the infrastructure in place to handle the huge influx of borrowers that will occur if FFELP is discontinued. Another disaster in the making; the Obama administration will do for student lending what Fannie and Freddie did for the mortgage industry.
What isn't noted by the writer it a far more sinister goal of controlling who will get to go to college now. Does anyone remember Goals 2000 during the Clinton years, which Americans rejected? It's goal was to track all of us from cradle to grave starting with early required preschool. Our education will be directed and decided by government. Then the government would decide what we are suited for in our future employment. This administration has already shown its hand by overstepping into deciding what some of us make in salary, so this tagged on legislation is another piece of the puzzle of reaching total control over Americans. This nightmare just keeps getting worse!!
"I pay 6.2% SS taxes. You pay 12.4%
You're getting hosed."
I know. Reagan did that to me. And I think the correct numbers are 6.7% and 13.4%.
It's nothing compared to what the self employed go through in order to buy health insurance. As you guys would say. Bend over.
Now we finally see why he wants this to pass – so HE can let all of US pay for HIS health care.
Since that's what you want – please find in the Constitution or the Federalist Papers where our Founders said that we should pay for ANYONE's health care.
Gotta say, I have grown tired of the gov'ts blame game and villanizing of the free market lately. Something ironic about this is that the gov't was the one who broke up industrail monopolies, but now it is creating its own monopolies within the US market.
Plus if you haven't paid throughout the year that will hit you with a big penalty for not allowing them to use your money for free all year long.
IMPEACH OBAMA!
http://theantiliberalzone.blogspot.com/2010/03/tr...
The NEW Anti Liberal Zone
The Articles of Impeachment laid out.
What bothers me is that the guy who pays for it makes the rules….. We see this in federal highway funding to the states all the time…. you only get the money if you accept the following rules in your state.
So if you accept a loan from the government to pay for your education, the government has the right to tell you where to attend school, what to major in, where to live and where you can work until your loan is repaid. It also creates more control over the colleges and universities since the condition of your students receiving federal financial loans will be following the rule of the government.
These conditions already exist to some extent, however the individual still has some control in who they borrow from and private universities still have some control of their mission and philosophy.
We currently have 2 of our 4 children in college and are paying for it from our pockets and they supplement their expenses with scholarships and by working. Our children understand that if the time comes that we cannot pay for it, that we will not take out loans. They understand that even if it means delaying their education, that accumulating debt for their education is not financially responsible.
What I see happening here is that in order to qualify for the student loan, you will have to serve time in Obamacore. This civilian arm that will be "just as well financed as the military" are in the beginning stages.
Think a greedy child in line at the store. They see the candy bars and start grabbing. They don't know what to do with them, can't eat them all but they still want to try for every one of them!
We need to control this crying baby in DC and make sure it knows who it works for, US! Not the president, but the people.
I love it – have you sent this to Glenn Beck?
The whole aim of the progressives is control, control, control and THEIR power. Remember, if you allow the government to grant you your rights, then they can also take them away. If the government makes you dependent on them, they can take away your food, housing, and life itself. Liberals and Progressives need to actually insert a brain between their ears and stop being lazy couch potatoes who want the government, via MY money to take care of them and absolve them of any responsibility of thoughtfully and properly living their lives.
What do you mean pay back the loan ? Wake up this is another "right" provided by obamasoros and paid for by the remaining taxpayers.
The question that really needs to be asked is, if you were designing a system in which the government guarantees 100% of the loans to students, would you need to include the private sector in this? Sure, the private sector has made some money pushing some paper for the government, but they are taking no risk and adding no value. Should we cheer that this creates "private sector" jobs, when really they are doing a government function and adding unncessary bureaucracy to the process?
This is really an issue when the Tea Party folks who are upset about government bailouts of the private sector should be in favor of this bill.
I'll bring the beer…..it's green today….
One of the next things this government will try to do is CONTROL MEANS OF COMMUNICATION.
At some point, whenever our freedom of the press seems to be threatening these progressives, they
will try, probably through some backdoor method by FCC, to clamp down. That includes the internet.
That includes the communication we are doing right now on this site. And don't say it can't happen.
Reality ….to be applied after all our works…..
QUOTE:
"So why, genius, is it in the health bill? Why were the panels that would regulate who gets what in the health care bill in the stimulus bill?"
——
Why was the death panel inserted into the stimu-LESS bill? Easy. So that the Liar-in-Chief can say there is no such thing in the healthcare bill. The death panel's already been signed into law. A government panel will decide who gets treatment and who doesn't, based upon cost of treatment, age and health history of patient and patient's future usefulness to society. Isn't that swell?
And now they can just "deem" it passed and is Law!
And there are still people out there who don't get it. /cry
Not only to indoctrinate, but this corrupt administration will use it as another revenue stream until it goes broke just like social security ad Medicare. Giving the IRS direct access to our bank accounts in the healthcare SCAM is another revenue stream for them. Determining who gets treatment and who doesn't (the elderly) will save them billions and they won't have to worry about mailing those pesky social security checks either.
This isn't about healthcare treatments. It's about selling insurance policies as another revenue stream because the public option is back in the plan. More money for Obamao and his corrupt cronies to spend on their various pork projects, with billions probably unaccounted for.
[...] Read this article: » Yet Another Government Takeover: Student Loan Edition – Big … [...]
The start of Obamao's brownshirts.
You all have covered most of my concerns about this takeover. My other question is, if Obama berates Insurance Companies for making an average 3% profit, why will it be OK for the government to borrow money from the Fed at 2.8%, but, the minimum interest rate to the student is 6.8%? And, where does that difference GO?
I'd like to see the fairness doctrine applied to college faculties
"Sure, the private sector has made some money pushing some paper for the government, but they are taking no risk and adding no value."
That isn't true. As Rep. Rogers pointed out, until the credit crunch PRIVATE capital markets have funded the vast majority of student loans. The government guarantees serve a purpose. Markets price risk- consider the interest rate on a credit card vs a secured auto or a home loan. Would you loan thosands of dollars to some pimply faced kid who's never had a job or some guy who just got laid off? Those government guarantees allow for a reasonable interest rate. As for "no risk" it is true the government assumes the ultimate risk but the fact remains the loan servicer assumes that risk up to that point and is responsible for collection and servicing of that debt. It isn't just about loan origination. And fwiw direct lending actually has higher default rates and has lost money every year since it's inception during the Clinton administration- the left's notion of "saving money" is a false one. As for "no value added" that's not the case either.
Right back to the "company store" days. The Company set the prices, interest charged, and how much to take out of your check.
Watch, the feds are going to get into setting tuition next. "Price Controls", you know.
"Saint Peter don't'cha call me cause I cain't goooo,…."
The feds still have the Ma-Dueces, too.
…….. In addition over 70% of schools prefer FFELP because of better servicing, student repayment counseling, and numerous other reasons. If direct lending (FDLP) is so great why haven't schools flocked to it? The fact is while they could have they haven't. Are there bad lenders/servicers? ……….. sure but there are many good ones. And unlike when the government takes over now you have at least some choice- when the government takes over there will be none- all the student loan eggs will be in one basket- the governments. The gov't/private partnership that is FFELP may not be really appealing to conservatives but the Obama altenative is far worse- a monopoly is never a good idea and a government one less so.
[...] rest is here: » Yet Another Government Takeover: Student Loan Edition – Big … Posted in Loan | Tags: 100-percent, a-100-percent, and-collector, approach, become-the, [...]
I think schools have flocked to the private lenders because the school officials involved were getting kickbacks, free vacations, etc. from those lenders. This was quite a scandal about 2 years ago, NY's attorney general did a large investigation and it turned out to be very widespread.
I think a revised headline should be put on this article: "Republican Congresswoman Wants to Bail Out Big Banks Again With Taxpayer Guarantees."
[...] The rest is here: » Yet Another Government Takeover: Student Loan Edition – Big … [...]
[...] » Yet Another Government Takeover: Student Loan Edition – Big … [...]
If the federal government controls all student loans then they will also control WHO gets the loans, HOW they get paid back ( social service will pay off the debt ), with the taxpayers picking up the debt, influence WHICH universities are eligible for the loans, WHAT is taught in order to qualify for the loans, WHAT majors are eligible for the loans. Just another governmental power grab that takes more liberties away fro WE THE PEOPLE.
I see they are already staffing up for the new student loan payment collection department:
https://www.fbo.gov/index?s=opportunity&mode=...
Man am I glad they never federailzed the Columbia Tape and Record club back in the day!!!
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