Democrats propose lower interest on some student loans

[PenforPrez]

Here it is, kids. As promised by the new Congress. H.R. 5 will slash subsidized student loan interest rates by half over five years, the cost to be covered by less money and fewer guarantees to the private lenders who control Federal student loans. It should come up to a vote this week.

http://www.cnn.com/2007/EDUCATION/01/12/student.loans.ap/index.html

Paul

[yankeeyosh]

That would be a godsend, and it should have been done fifteen years ago. I don't know whether it will pass, but it's definitely a step in the right direction. The education secretary's comments frustrate me because Bu$h has been in office for six years, yet there has been no noticeable increase in the Pell grants.

[PenforPrez]

That would be a godsend, and it should have been done fifteen years ago. I don't know whether it will pass, but it's definitely a step in the right direction. The education secretary's comments frustrate me because Bu$h has been in office for six years, yet there has been no noticeable increase in the Pell grants.

It'll pass Congress without problems. In the Senate, you'll probably have Republicans Susan Collins and Olympia Snowe of Maine vote for it, so it'll pass. And I don't see any of the Democrats breaking ranks here. That's 53 votes.

The problem I see is like what Bush is doing with the minimum wage bill. Bush is offering support for a minimum wage increase only if it is tied to another tax cut for businesses. The Democrats aren't about to support a business tax cut. I figure Bush will tack some ridiculous demand to this bill also, then veto it when the Democrats don't agree.

Paul

[Syracuse]

Question, does this count only for new kids getting loans, or also for someone who already has student loans, and those existing rates would be lowered? Also I'm guessing if a bunch of college loans were consolidated that interest rate would stay the same forever, despite any law?

[beeblebrox]

Question, does this count only for new kids getting loans, or also for someone who already has student loans, and those existing rates would be lowered? Also I'm guessing if a bunch of college loans were consolidated that interest rate would stay the same forever, despite any law?

I have a feeling that my student loans from 2004 will stay the same even though they are subsidized ones only. It would be interesting to see when I go back to graduate school what the loans will be like. My consolidated loans are at a 3.375% rate before the recent rate increase.

[PenforPrez]

Question, does this count only for new kids getting loans, or also for someone who already has student loans, and those existing rates would be lowered? Also I'm guessing if a bunch of college loans were consolidated that interest rate would stay the same forever, despite any law?

I was just browsing through the text of the legislation. It appears (to my understanding) that this will apply to loans made beginning in fiscal year '07 (which started July 1, '06). So for existing loans, probably not. Also, unsubsized loans are not covered here.

http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.5.IH:

Paul

[beeblebrox]

I was just browsing through the text of the legislation. It appears (to my understanding) that this will apply to loans made beginning in fiscal year '07 (which started July 1, '06). So for existing loans, probably not. Also, unsubsized loans are not covered here.

http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.5.IH:

Paul

I think that the lending companies can make more money off of the unsubsidized loans. So this legislation is a trinkle in a big bucket of student loans where a small percentage will get some relief while others won't.

[yankeeyosh]

I think that the lending companies can make more money off of the unsubsidized loans. So this legislation is a trinkle in a big bucket of student loans where a small percentage will get some relief while others won't.

Yeah, it doesn't affect unsubsidized loans. But I don't think those rates will rise because they are directly related to the interest rates the Federal Reserve maintain. What I fear may rise are the rates of the private loans, which are a burgeoning industry in the financial aid world.

[PenforPrez]

I think that the lending companies can make more money off of the unsubsidized loans. So this legislation is a trinkle in a big bucket of student loans where a small percentage will get some relief while others won't.

Not necessarily. The holders of the subsidized loans get some pretty nice guarantees from the government. Some of those are cut in this legislation to pay for the interest rate cut, except for smaller lenders.

Paul

[Millenial]

does this mean private loans already dispursed can have lower rates in the future?

[PenforPrez]

does this mean private loans already dispursed can have lower rates in the future?

Not for loans already disbursed.

[PenforPrez]

The bill passed in the House 356 to 71. All 71 nays were Republicans.

http://clerk.house.gov/evs/2007/roll032.xml

Paul

[yankeeyosh]

The bill passed in the House 356 to 71. All 71 nays were Republicans.

http://clerk.house.gov/evs/2007/roll032.xml

Paul

$urpi$e, $urpri$e...

[dongle]

The bill passed in the House 356 to 71. All 71 nays were Republicans.

Paul

I thought the Republican thinking was that cutting the rates would encourage students to take on additional debt that they shouldnt have. This is obviously retarded, student loans are not for going to the mall and buying new shoes. Does anyone else know why exactly the Republicans are against lowering the rates? Especially since they love cutting taxes for businesses and rich people.

[Syracuse]

I thought the Republican thinking was that cutting the rates would encourage students to take on additional debt that they shouldnt have. This is obviously retarded, student loans are not for going to the mall and buying new shoes. Does anyone else know why exactly the Republicans are against lowering the rates? Especially since they love cutting taxes for businesses and rich people.
Easy answer? They're evil.

[EmberMae]

I thought the Republican thinking was that cutting the rates would encourage students to take on additional debt that they shouldnt have. This is obviously retarded, student loans are not for going to the mall and buying new shoes. Does anyone else know why exactly the Republicans are against lowering the rates? Especially since they love cutting taxes for businesses and rich people.
because the people who benefit from lower rates on student loans aren't businesses and rich people?

I think the key reason republicans are opposed can be found here:
To avoid increasing the deficit, the bill's cost would be offset by trimming subsidies the government gives lenders and reducing the guaranteed return banks get when students default. Banks also would have to pay more in fees.

[PenforPrez]

Exactly. I saw that coming a mile away. A lot of Republicans voting no were party leaders in the House: Dennis Hastert, John Boehner, Roy Blunt, etc.

Paul

[wordsmith]

I thought the Republican thinking was that cutting the rates would encourage students to take on additional debt that they shouldnt have. This is obviously retarded, student loans are not for going to the mall and buying new shoes.

Actually, I remember a lot of people using their student loan money on stuff other than their tuition, room, board, books, etc.

Mine was set up to feed DIRECTLY to my school, I never touched the money. But I know PLENTY of people who blew their student loan $$$.

[WorkInProgress]

Mine was set up to feed DIRECTLY to my school, I never touched the money. But I know PLENTY of people who blew their student loan $$$.

This is how mine was set up too. I never saw a check, as it was all direct, which I'm fine with, and I'm not really sure why it's not like that as a general rule.

[wordsmith]

This is how mine was set up too. I never saw a check, as it was all direct, which I'm fine with, and I'm not really sure why it's not like that as a general rule.

Same, here.

My brother was a Div. I scholarship athlete, meaning he got his schooling 100% paid for when he was drafted to play his sport. He could have graduated owing absolutely nothing. However, as a sophomore, he decided it would be better to take his scholarship payments and use them on rent in a townhome complex where all his teammates lived, rather than live in the dorms (which were free for him). As a result, he graduated from a state school that offered to fund his schooling 100% owing nearly as much as I do in private school debt.

Not smart.

[Syracuse]

My dad got a full scholarship to college, but took out a student loan to by a motocycle, then never paid back the loan. I guess that's what republicans are afraid of. I think that's harder to do nowadays though, if you don't repay a loan you get hounded. Why screw over the majority of kids because a few try to screw the system?

[WorkInProgress]

Why screw over the majority of kids because a few try to screw the system?

Because somebody has to pay for those who screw it up for the rest of everyone. And nobody wants to be the one stuck with the bill.

[Syracuse]

Because somebody has to pay for those who screw it up for the rest of everyone. And nobody wants to be the one stuck with the bill.
Well yeah, no one wants to pay any type of tax. That's why we have to have votes like this to force peopel to pay taxes. If we didn't pay taxes we'd be fighting for scraps in the streets like dogs.

[wordsmith]

Because somebody has to pay for those who screw it up for the rest of everyone. And nobody wants to be the one stuck with the bill.

Yep. It's the few who ruin things for the majority, too often.