Skip to comments.House Passes Student Loan Overhaul (federal government will be lone provider of college loans)
Posted on 09/17/2009 3:34:51 PM PDT by Libloather
House Passes Student Loan Overhaul
Sept. 17, 2009
WASHINGTON (UPI) -- The U.S. House approved legislation that would overhaul the student loan market by setting up the federal government as the lone provider of college loans.
The House vote was 253-to-171, largely along party lines, The Wall Street Journal reported.
Under the legislation, private lenders would be blocked from the market for originating loans, but private banks and lenders still would be able to bid for a limited number of contracts to service loans after they are made by the government.
The bill is another plank of the ambitious domestic agenda for President Barack Obama, who referenced the House vote Thursday during a healthcare rally at the University of Maryland.
"This plan would end the billions upon billions of dollars in unwarranted subsidies that we hand out to banks and financial institutions -- money that doesn't do anything to make your loans any cheaper," Obama said. "Instead we're going to use that money to guarantee access to low-cost loans no matter what the economy looks like."
The savings could be used to strengthen Pell grants and Perkins loans, he said, "to make college more affordable."
The legislation also would "simplify the complicated, convoluted financial aid forms so it's easier for you to apply for help and get the finances that you need," he said.
(Excerpt) Read more at hispanicbusiness.com ...
The federal government will now be able to deny loans to european-american male students based on “diversity” considerations.
So, if I want to lend college money to my Godson - am I a private lender and now blocked from doing so???
What's the purpose of this?
And it will only get worse, unless we stop this disease. Kenya's greatest gift to the world since the mau-maus.
Your choice of words reminds of a municipal landscaping code I read once (when I was in the business) in Florida: Pasco County, I believe it was, but that's virtually immaterial, because they're all about the same.
There is a prohibition against the use of domesticated plant species on public projects. IIRC, they define a domesticated species as one that was introduced by Europeans after 1600 -- this was the gist of it at least. Might have forgotten the details but the "European" part stuck with me.
This isn’t the most well written of articles. The loans which I think are affected are the ones which are guaranteed by the federal government.
the fafsa is indeed “an intrusive gubbermint form,” but it was around when obama was still voting “present” in Chicago.
If Zer0 wants my student loans he can have them. I’ll just consider it my bailout. Thanks you guys!
The purpose is to not provide student loans to folks who are not those of affirmative action status.
How hard is this for anyone to understand?
No, actually, it sounds like it affects government guaranteed loans, which, arguably, is the prerogative of the guarantor.
Of course when the guarantor is the government the competition is arguably unfair...
I guess I haven't really refuted your point but it may not be quite a cut-and-dried as that.
There are also two loan programs in the US, or at least there used to be if this passes, the Direct Loan program from Uncle Sam, and the Federal Family Education Loan Program (FFELP) that gets it's money from private banks. The two programs have identical loan terms. Everything is mirrored.
What they are trying to do is do away with FFELP loans and only have Direct Loans.
As far as having to fill out a FAFSA before being allowed to borrow through a student loan program, there are reasons for that. There are limits on how much students can borrow. This is to combat the ever rising levels of indebtedness that students are experiencing upon graduation. It also guarantees that students don't borrow above and beyond their cost of attendance. Going to school isn't supposed to be a financial free for all where students and parents get to borrow to their heart's content. If that is your goal, there are always alternative student loans through Wells Fargo that have more draconian loan terms than the federal student loan programs.
I guess if you are register Republican your loan will be denied.
F@#k that! Banks should just stay away; there is no sense in taking on risk especially if they are now overseen by the government to the nth degree. Why get stuck with bad loans that are notorious for being defaulted on.
As to the Dems and O doing this, this is the same bs that people that support publicly-financed political campaigns like - making up the rules for those that qualify for loans and grants. Gender, race, sexual orientation will all be used to skew the system and reward many students that will drop out because they were "over -challenged)
The question is will there be cash-for-clunkers delays now (since there is no competition)?
It would seem to me that this move will strengthen any court case that challenges the institutionalized bias in college hiring towards professors, administrations etc. bias towards the Dems (far left).
THe application also verifies if you are eligible for grants (Pell, etc.).
“The federal government will now be able to deny loans to european-american male students based on diversity considerations.”
That was my first thought when I heard this announced today. Also wondering if banks want out of the student loan business because so many default on repayment.
doesn’t this just go right along with the Serve America Act that he (Pres O) recently signed in Spring 09? If I recall, that Act sets up students for “voluntary” service to specified activities, none of which are religious in nature.
If so, then he’s just rolling right along with his plan to have mandatory service for all Americans between ages 18 and 45 (could be wrong on the ages)...maybe he’s hoping/planning for these young people to be part of his civilian force?
Just thinking aloud...