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House Passes Student Loan Overhaul (federal government will be lone provider of college loans)
Hispanic Business ^ | 9/17/09

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 ...


TOPICS: Crime/Corruption; Extended News; Government; News/Current Events
KEYWORDS: house; loan; loot; student
What's next - 401Ks? I'm betting money on it.
1 posted on 09/17/2009 3:34:52 PM PDT by Libloather
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To: Libloather

The federal government will now be able to deny loans to european-american male students based on “diversity” considerations.


2 posted on 09/17/2009 3:37:39 PM PDT by gorilla_warrior (Metrosexual hairless RINOs for hopey-changey bipartisan-ness)
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To: Libloather; All

So, if I want to lend college money to my Godson - am I a private lender and now blocked from doing so???


3 posted on 09/17/2009 3:38:38 PM PDT by Lmo56
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To: Libloather
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.

What's the purpose of this?

4 posted on 09/17/2009 3:38:49 PM PDT by the invisib1e hand (hang the Czars.)
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To: Libloather
Applying for student loans this summer has been a mess. Used to be able to google up Key or Citi or whomever, and apply for a loan. Now, no can do, without first filling out an intrusive gubbermint form (FAFSA) that smells like a tax return, and is just about as long. And that's not a loan app, that is merely the gubbermint gatekeeper letting you talk to a bank after advising the gubbermint of details about your financial life.

And it will only get worse, unless we stop this disease. Kenya's greatest gift to the world since the mau-maus.

5 posted on 09/17/2009 3:41:19 PM PDT by hinckley buzzard (truth--the liberal's kryptonite.)
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To: gorilla_warrior
The federal government will now be able to deny loans to european-american male students based on “diversity” considerations.

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.

6 posted on 09/17/2009 3:41:31 PM PDT by the invisib1e hand (hang the Czars.)
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To: Lmo56

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.


7 posted on 09/17/2009 3:41:46 PM PDT by Mr. Lucky
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To: hinckley buzzard

the fafsa is indeed “an intrusive gubbermint form,” but it was around when obama was still voting “present” in Chicago.


8 posted on 09/17/2009 3:42:46 PM PDT by the invisib1e hand (hang the Czars.)
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To: Libloather

If Zer0 wants my student loans he can have them. I’ll just consider it my bailout. Thanks you guys!


9 posted on 09/17/2009 3:42:55 PM PDT by musicbymuzak
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To: the invisib1e hand

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?


10 posted on 09/17/2009 3:46:23 PM PDT by tiger63
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To: Libloather

Ping


11 posted on 09/17/2009 3:49:47 PM PDT by 4Speed
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To: tiger63
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.

12 posted on 09/17/2009 3:49:55 PM PDT by the invisib1e hand (hang the Czars.)
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To: hinckley buzzard
There are primarily two types of student loans, subsidized and unsubsidized. They are based upon income. That is why the FAFSA asks you for financial information. Subsidized loans do not accrue interest while the student is in school, unsubsidized loans do.

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.

13 posted on 09/17/2009 3:55:08 PM PDT by rednesss (fascism is the union,marriage,merger or fusion of corporate economic power with governmental power)
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To: the invisib1e hand

I guess if you are register Republican your loan will be denied.


14 posted on 09/17/2009 3:58:27 PM PDT by man from mars
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To: Libloather
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.

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)

15 posted on 09/17/2009 4:05:09 PM PDT by torchthemummy (No Obama: Not Because He's Black But Because He's Red)
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To: tiger63
The purpose is to not provide student loans to folks who are not those of affirmative action status.

The question is will there be cash-for-clunkers delays now (since there is no competition)?

16 posted on 09/17/2009 4:07:10 PM PDT by torchthemummy (No Obama: Not Because He's Black But Because He's Red)
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To: Libloather
"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."

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).

17 posted on 09/17/2009 4:09:51 PM PDT by torchthemummy (No Obama: Not Because He's Black But Because He's Red)
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To: rednesss; hinckley buzzard

THe application also verifies if you are eligible for grants (Pell, etc.).


18 posted on 09/17/2009 4:12:09 PM PDT by ican'tbelieveit (Join FreeRepublic's Folding@Home team (Team# 36120), KW:Folding)
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To: gorilla_warrior

“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.


19 posted on 09/17/2009 4:19:57 PM PDT by Fu-fu2
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To: Libloather

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...


20 posted on 09/17/2009 4:29:12 PM PDT by sassy steel magnolia (USAF life and Navy wife...God Bless the USA!)
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To: the invisib1e hand

It’s another tentacle of the growing power grab.


21 posted on 09/17/2009 4:31:28 PM PDT by ViLaLuz (2 Chronicles 7:14)
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To: gorilla_warrior
"The federal government will now be able to deny loans to european-american male students based on “diversity” considerations."

We are now "native americans." They can DNA test us if they like; otherwise, we're getting IN!
22 posted on 09/17/2009 4:36:47 PM PDT by DRey
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To: ican'tbelieveit
"THe application also verifies if you are eligible for grants (Pell, etc.)."

Indeed, both federal and state programs. I was responding to a question about needing to fill out a FAFSA in order to get a student loan though.

There's Pell Grants, SEOG, ACG, state programs like the Oregon Opportunity Grant which is a mixture of state funds and federal LEAP/SLEAP funds.......

23 posted on 09/17/2009 4:37:59 PM PDT by rednesss (fascism is the union,marriage,merger or fusion of corporate economic power with governmental power)
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To: sassy steel magnolia

My thoughts exactly!


24 posted on 09/17/2009 4:56:03 PM PDT by NicNacPattyWac
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To: Libloather

Somehow I get the feeling that this is the start of brown shirts. Suppose in the fine print they only give the student a month to pay the loan back or they can serve 4 years in his “brown shirt” army. Could this be the real motive. Could somebody read the bill, or could King Obama just tack this on years later. This is just how I feel since everything King Obama does has a corrupt motive behind it. This is just food for thought.


25 posted on 09/17/2009 5:11:37 PM PDT by Logical me (Oh, well!!!)
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