Skip to comments.Pelosi joins Democrats' push for Republicans to act on student loan rates (What about Hussein?)
Posted on 04/21/2012 10:01:03 PM PDT by Libloather
Pelosi joins Democrats' push for Republicans to act on student loan rates
By Mike Lillis - 04/21/12 11:11 AM ET
The leading House Democrat on Saturday joined President Obama in calling on Republicans to extend low interest rates on student loans.
House Minority Leader Nancy Pelosi warned that allowing rates to jump, as they're scheduled to do this summer, would put college "further out of reach" for middle class families struggling in the still-limping economy.
"[I]f Republicans don't act, interest rates are set to double this July, and more than seven million borrowers will find themselves paying more," Pelosi said Saturday in a statement. "In this time of economic hardship, we should be helping make college more affordable, not putting it further out of reach."
The comments are the latest salvo in the intensifying partisan debate over whether to extend a popular, five-year-old student loan benefit. Republicans say the country simply can't afford the $6 billion tab, while Democrats counter that the country will benefit many times over by a more educated populace. They're hoping to frame the debate as one of contrasting priorities, with Republicans fighting for the wealthy and Democrats focusing on the the middle class.
"In America, higher education cannot be a luxury; its an economic imperative that every family must be able to afford," Obama said Saturday in his weekly address from the White House.
A 2007 law the College Cost Reduction and Access Act cut the interest rate on federal Stafford loans in half, from 6.8 to 3.4 percent. The legislation was initiated by Democratic leaders in Congress, but it passed with Republican support, and President George W. Bush signed it into law.
Without congressional action, the rate returns to 6.8 percent on July 1.
Republicans are already pushing back. Rep. John Kline (R-Minn.), chairman of the House Education and Workforce Committee, argued this week that any extension of the loan benefit should be offset with changes elsewhere in the budget. Additionally, Kline warned that the one-year time-frame doesn't solve any problems, but "simply kicks the can down the road and creates more uncertainty in the long run."
"Bad policy based on lofty campaign promises has put us in an untenable situation," Kline said Friday in a statement. "We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers."
Complicating the Republicans' argument about deficit concerns, GOP leaders this week passed a small-business tax cut bill estimated to pile $46 billion onto the deficit this year alone. Republican leaders have argued that tax cuts don't need to be offset, but Democrats are wondering what happened to the GOP pledge to fight for a balanced budget.
Rep. Steny Hoyer (Md.), the Democratic whip, hammered Republicans during the tax bill debate for defying their own platform of reducing deficits.
"If we are going to be serious about giving confidence to the economy, to the American people, it will be because we put our country on a fiscally sustainable path," Hoyer said. "Continuing to blow holes in revenues will not do that."
Sure would be nice to know.
Just make student loans dischargeable in bankruptcy again. The whole game will change overnight.
Just make student loans dischargeable in bankruptcy again. The whole game will change overnight.
I worked my way through higher education (digging s^it pipes by hand) and then chose to become a Marine.
We are footing this bill for these idiots to get ‘equal’ education, when they should not even be in the pipeline = lower the standards.
Tax rates are going to go up. Why pay for people who should have not wasted our money to say they have a higher education.
I was lucky to get mine. I earned it and payed back for it.
If I had not had the opportunity, I would have continued to work my butt off digging pipes.
Do better: Make student loan debt dischargeable by bankruptcy, so that the money won’t be loaned out to people who want useless degrees, creating a class of people who think an “education” entitles them to a middle class living.
The Dems are trying to put everything on the Republicans.
The Democrats aren’t even interested in good government.
Hey, I got a wild and crazy idea - how about cutting the cost of college? Silly idea, I know. You start by slicing out all the graft - requiring professors to maybe work as much as 20 hours a week instead of the more customary 10.
OH! I know, and cut out all those useless chairs and departments - I mean, really, do you realize how many young men going to college are disappointed to find out that ‘women’s studies’ does not involve standing around and appreciating a hot body?
And Latino studies? What? NO COOKING CLASSES? What use is THAT department? Not even a good hot salsa dance course either. Just endless classes trying to figure out some manner to make Che Guevera into something other than a mass murdering opportunist.
That these courses are in some state liberal arts school - eh, I guess that might work out, but at an engineering college? You have to figure at least a quarter of all tuition is going straight down the drain of these useless courses. That’s one heck of a price tab for things no one really gives a rip about.
It’s about as useful as an ethics course at a law school. In one ear, out another orifice.
Mandating some reduced interest rate only artificially inflates the ‘buying power’ of loans - IE: the amount of money they can sucker loan takers into digging themselves into debt. But guess the one institution which has absolutely no interest in getting into the loan game? Shouldn’t be too hard - that’s right! The universities themselves. A lot of them have big fat endowments which could easily be used as security for student loans, and they could use their enlightened viewpoints to make those loans for almost nothing. Surely the students they educate would never stiff them on the loans, right?
But, when I was in college, the cost for one year - tuition, room & board, books, etc. - was only $4,000.
The problem is not interest rates, its the runaway cost of "Big Education."
If each state would actually review, audit, and take control of their state colleges....then you wouldn’t have this mess. The idea that twelve of your coaches for your one state college (football, baseball, soccer, basketball, etc) are pulling in $25 million in salary...ought to shock a state legislature. Or if you came to notice that twenty foreign professors are on the staff of the college and each makes $150k or more....ought to shock a state legislature. States need to stand up and review the mess that has been created.
All part of the dem machine. All those useless courses sever their cause.
What a crock of sh**. The Democrats have cut the ability for students to even get loans. If you are an undergraduate, the amount of money you can get has decreased. If you are a graduate student you can’t even get subsidized loans at all thanks to 0bama. This is just political wrangling by the Dems, nothing more, nothing less.
It just emphasizes the point that a democrat is only in favor of a program that helps people only if it is designed to keep the person dependent on the government. If it is designed to give a person the ability to really make a positive change in their lives and no longer be dependent on the government, then they want nothing to do with it.
Didnt Obama have the federal government take over all the student loans? Is that why the rates are so high since there is no competition.
I guess when a C student who applied to Harvard Law School never thought she would get in and actually have to repay those loans.
I completely agree that the tuitions are needlessly high and there's plenty of waste at these universities. However, too many of these kids took out the *full amount* in tuition and room and board for their college stay. There was an article in the WSJ about young people struggling to pay their loans. There was a woman who graduated Kent State in the 2008 with 80,000 in student loans. WHAT??? Did she never have a summer job? Did she not work during school? Did her parents contribute absolutely nothing?
Maybe her parents didn't contribute anything and she was too disorganized/stupid to attend school while simultaneously holding down a part time job, but there is absolutely NO reason a healthy young person can't earn darn near ten thousand every summer. Minimum wage is 7 bucks an hour (maybe more, I don't know). I do know that when my kids were going to college back in the early 80's, our rule was they needed to contribuute at least 5k toward their tuition or we figured they didn't want it bad enough. Most of the time our kids actually contributed much more as they often paid for their own books, food, etc.
I do feel sorry for these kids mired in student loan debt and I believe the loans should bankruptible, but somebody needed to be smacking these kids upside the head while they were spending their student loan money on spring breaks and partying.
Hopefully if the kids in college today will focus less on changes in interest rates to their college loans and more on their chances of finding a job when they graduate they’ll wake up and vote Obama out of office before it’s too late!
Couple years ago, my then 28 year old daughter was going to nursing school. She looked at the student loan route and it was pretty convoluted - folks started sending her different payment plans and expectations and she only enquired without actually taking a loan. She didn’t think she and her husband could foot it without a ,oan and asked me for help. I told her that instead of giving a lump sum up front, I would want to go over their budget and make sure they were sticking to one, then I would assist just enough to keep them above water. She graduated and never needed a penny. Most folks taking student loans are idiots and take the max they can get up front and act as if it will never come due. Then the taxpayers end up footing the cost. If they were forced to actually work at a budget and give things up to minimize money needed, we would be much better off. Plus, we wouldn’t have so many taking out loans for liberal arts crap.
DITTO. I would base the rate, amount, and eligibility on the student’s major, prospect of being employed based on major and typical salary of such jobs. This will mean the bank will lend less out for students majoring in worthlessness vs hard sciences or skills. That will kill many liberal arts BS majors and hopefully the number of people attending them. If Pelosi wants extention, GOP should take advantage of desire and start modifying the terms of loans to reduce risk of nonpayment.
GOP reps need to be smart and they are not because who gets backed is funded by the powers to be in this country (the true 1 percent). They want Congress people to be dumb so the corporate lobbyist can sway them one way or the other in the corporate favor. I digress. If the Dems put up a sob story student, the GOP need to ask her how much does she think she will make if she graduates and gets a job. Have real stats in back pocket as she answers. Then ask her how on that salary is she going to pay back the ivy league college tuition? Most cases it will involve someone taking 90,000 plus loan and landing a 30,000 salary. Then the GOP rep should do what a typical astute person does before he takes on a loan by calculating payment vs take home pay minus other essential costs/bills. In other words show the dumb student how she screwed up by not estimating the affordability of the loan before she signed up for it. Then explain to her that adult Americans do this everyday in America before they borrow money and she did not. At that point the rep should ask who should be responsible for the stupid arrangement, she or the taxpayers?
I have worked around a few of this type and for the most part it's a good thing. Big sports,not so much.
It takes a LOT of hours at summer jobs and working through school to pay off $80,000 or even a fraction of that.
When I was in college 45 years ago, I paid most of my tuition with jobs. It was a whopping $750 total per semester for 18-19 credit hours. Now $750 won't buy ONE credit hour at a lot of schools. And most kids aren't carrying 18 hours anymore.
Those of us who worked our way through school and paid off our loans in a timely manner didn't have to contend with Obama's wretched economy.
"U.S. Teen Unemployment at Unprecedented Levels"
My point is that the woman with the 80k in loans took out tuition, room and board, and apparently living expenses to attend a state school. Her parents contributed nothing and she also contributed nothing. If her parents were really unable to pay nothing, she should have gotten some financial aid. If they weren't incapable of paying, but simply choosing not to, then she should have been working her butt off during summers and breaks. No way she should have had to pay her entire state school education with student loans unless she was a) too lazy to work during college or b) spending foolishly. Either way, somebody, presumably her parents, should have smacked her upside the head while she was an undergrad.
I will agree the economy is in a depression. However, I still think kids can hustle waitressing, babysitting, and lawn mowing jobs. As a bonus, they're largely paid under the table. And if you can't get a job mowing lawns, you're just not trying.
I agree, tuitions are out of line with reality. I've been predicting for years that college tuitions are the next bubble that's going to burst. However, I think the number of people who actually need to be taking out loans that cover full tuition AND room and board are miniscule. The number of people who actually do take out the full amount is both staggering and frightening.
That's the problem, in a nutshell.
The number of people who actually do take out the full amount is both staggering and frightening.
I'm not sure what the maximum student loan amount is this year (our kids who are in college managed to avoid taking out student loans thanks to scholarships, work, and help from us) but I don't think the maximum loan amount is sufficient to cover tuition, room, board and other essentials (for instance, each student is required to bring their own computer). State schools average close to $20 K per year, and private schools close to $50 K.
Another cause of education inflation is the frivolous course requirements. Courses in "diversity" and social science are required for an engineering degree.
Also, the part-time jobs that students used to rely on to work their way through school have been snapped up by desperate adults who've lost their full-time jobs, and by illegal aliens getting paid under the table.
How do you earn $10,000 in a summer at $7 an hour? That’s 1400 hours. At 8 hours a day, that’s 175 days. at 5 days a week that’s 35 weeks. That’s a LONG summer.