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Government takes over all student loans.





jwellsy
http://online.wsj.com/article/SB125321217589620383.html

Quote:
he House of Representatives approved legislation Thursday that would effectively end private-lender involvement in the student-loan market, establishing the federal government as the sole provider of college loans.

The bill introduces sweeping changes to the U.S. higher-education system and serves as the third central plank of President Barack Obama's domestic agenda.

Similar to the continuing efforts at overhauling health care, the changes to the federal government's higher-education policies would have a serious effect on the bottom line for private-sector players currently serving the marketplace.

The House vote was 253-to-171, largely along party lines.

Under the legislation, all lenders would be cut out of the market for originating loans. There would still be a role for private banks and lenders to bid for a limited number of contracts to service the loans after they are made by the government.


Now the government will control who is allowed to get student loans so they can nudge the redistribution of wealth along.
Bikerman
Sound to me like a very sensible proposal. It doesn't give the government control, since the criteria for getting a loan will, presumably, stay the same. What it DOES do is force out the shysters who profit from student loans.
We do it slightly differently here, but there are similarities in that student loans are fixed, centrally, at a certain rate and the pay-back criteria are also fixed (you only start paying back when you reach a certain earning level).
ocalhoun
Bikerman wrote:
since the criteria for getting a loan will, presumably, stay the same.

Sounds like a tricky presumption there. I'd want a guarantee of that before being able to tolerate government control of the system.
Bikerman
ocalhoun wrote:
Bikerman wrote:
since the criteria for getting a loan will, presumably, stay the same.

Sounds like a tricky presumption there. I'd want a guarantee of that before being able to tolerate government control of the system.
Well, any change is hardly likely to be political. You are not suggesting (I am sure) that the Government would require membership of the Democratic party. So, therefore, what conditions do you think that the Government COULD impose that would be a problem?
ocalhoun
Bikerman wrote:
ocalhoun wrote:
Bikerman wrote:
since the criteria for getting a loan will, presumably, stay the same.

Sounds like a tricky presumption there. I'd want a guarantee of that before being able to tolerate government control of the system.
Well, any change is hardly likely to be political. You are not suggesting (I am sure) that the Government would require membership of the Democratic party. So, therefore, what conditions do you think that the Government COULD impose that would be a problem?

Well, here's a few somewhat possible ones:
-requirement that they are given to low-income people, despite the increased risk... leading eventually to bank failures (or a failure of the government's system, depending on how it is set up). (and causing student loans to be more expensive for everybody...)
-requirement that they give preferential treatment to minorities.
-requirement that they not be given to [convicts, anti-government persons, suspected terrorists, et cetera] which would lead to unfair exlcusions of people who would otherwise get a loan.
-use the lure of a fat student-loan contract to attract campaign fund 'donations' (bribes) from competing banks.

Some very unlikely ones, but ones that might happen if the government goes downhill and really starts abusing its power:
-Extreme preference to give loans to the party in power, or make it a requirement
-Exclude political dissenters
-Target 'problem' students by removing their loan, cutting off funding.
-Require that recipients of loans go into 'approved' carrier fields.
-Target loan-repaying individuals who have attracted government displeasure with extra 'fines' and extra requirements for quicker repayment, or have them prosecuted for failing to repay the loan, when actually an 'accounting error' made their payments not show up.
-Specify that interest from the loans goes to certain individuals.


And remember, these programs stay around. Just because the people in power now don't abuse them doesn't mean that they'll never be abused. If it is possible to abuse this power, somebody will, eventually.
Bikerman
Quote:
requirement that they are given to low-income people
Wow...look at what you are saying and be ashamed. Since when have students been in full time employment? I presume you are saying that loans should not be given to students who have poor parents because such students are genetically risky? What the hell has the parent's income got to do with anything? The STUDENT has the loan, NOT the parents. Trying to link this issue with the current financial problem in the housing market is cheap and shoddy, as well as being completely nonsensical. On the one hand you have banks queuing up to give mortgages to people who could never hope to pay it back. On the other hand you have a loan to a student, based on his/her qualification to do a particular course. Tell me, where is the similarity?

Quite frankly your paranoia against 'big government' is getting ridiculous. I like to debate with alternative thinkers, but not with lunatic conspiracy theorists. If you want to look at how such loan systems works in the real world then consider the UK system. Students here get loans based on their exam results and their ability to do the course. It isn't rocket science.
ocalhoun
Bikerman wrote:
Quote:
requirement that they are given to low-income people
Wow...look at what you are saying and be ashamed. Since when have students been in full time employment? I presume you are saying that loans should not be given to students who have poor parents because such students are genetically risky? What the hell has the parent's income got to do with anything? The STUDENT has the loan, NOT the parents. Trying to link this issue with the current financial problem in the housing market is cheap and shoddy, as well as being completely nonsensical. On the one hand you have banks queuing up to give mortgages to people who could never hope to pay it back. On the other hand you have a loan to a student, based on his/her qualification to do a particular course. Tell me, where is the similarity?


Oops, that was a mistake... That particular one was poorly thought out, I was thinking more on the basis of ordinary loans, and forgot that college loans can't really expect any collateral.

To fix it, simply replace "low-income" with "high-risk". The government could mandate that loans be given to people with mediocre test scores, or to people with bad credit, giving the same results.

Quote:

Quite frankly your paranoia against 'big government' is getting ridiculous. I like to debate with alternative thinkers, but not with lunatic conspiracy theorists.

Well, if thinking that a 1984-esque situation is at least somewhat possible, and noticing a trend heading in that general direction makes me a 'lunatic conspiracy theorist'... I guess I am guilty of 'doubleplus ungood thoughtcrime'
jwellsy
How long will it take to appoint a student loan czar? I mean "Point Person". That's one of the latest doublespeak proclomations. We have no czars. This administration has never appointed a single czar, so they just said. Yeah, you wacky conspirathists! They couldn't possibly rule like wacked out liberal extremists. They have to rule from the center don't they. Don't they?
deanhills
I hate too much Government, but I am in favour of this aspect of it. It would be great to have an official Government Website that summarizes information about how and where to get a loan, or to at least publish a list of useful links. As well as student bursaries. If everything could happen off the Website, include applications, etc. perhaps it will help students.

I would imagine if they appoint a Department to take charge of loans, that the above will be logical offshoots for centralized funding for students information as well. Perhaps Universities and Technical Colleges could be affiliated with it too as well as all the financial institutions, or at least listing those with links, as well as bursaries that are available.
Bikerman
ocalhoun wrote:
Oops, that was a mistake... That particular one was poorly thought out, I was thinking more on the basis of ordinary loans, and forgot that college loans can't really expect any collateral.
Good. I accept that.
Quote:
To fix it, simply replace "low-income" with "high-risk". The government could mandate that loans be given to people with mediocre test scores, or to people with bad credit, giving the same results.
Why on earth should Government do that?
I repeat - look at existing systems before you start to second-guess 'worst case' scenarios. Student loans work in a lot of countries - including mine. The idea that the Government would set entrance criteria is silly. The universities set the entrance criteria and select the students. The Government then simply guarantees their student loan. It is fairly straightforward. The only real controversy here is whether there should actually BE student loans, or whether this discourages the working class students. There is no suggestion that the government are getting involved in student selection. I repeat, why on earth would they?
jwellsy
Bikerman wrote:
Why on earth should Government do that?
I repeat - look at existing systems before you start to second-guess 'worst case' scenarios. Student loans work in a lot of countries - including mine. The idea that the Government would set entrance criteria is silly. The universities set the entrance criteria and select the students. The Government then simply guarantees their student loan. It is fairly straightforward. The only real controversy here is whether there should actually BE student loans, or whether this discourages the working class students. There is no suggestion that the government are getting involved in student selection. I repeat, why on earth would they?


You don't have to second guess worst case scenarios. They have stated many times over that their main objective is the redistribution of wealth. To believe they would abandon that philosophy and establish a system that doesn't "nudge" (their term) things in that direction is blind naivety. That's just how they want the masses, to accept everything without question or objection. Remember how the world was going to end if all this wasn't passed in the first couple of month's in power. There are no bounds to what they will say or try, to acheive their objectives.
Bikerman
jwellsy wrote:
Bikerman wrote:
Why on earth should Government do that?
I repeat - look at existing systems before you start to second-guess 'worst case' scenarios. Student loans work in a lot of countries - including mine. The idea that the Government would set entrance criteria is silly. The universities set the entrance criteria and select the students. The Government then simply guarantees their student loan. It is fairly straightforward. The only real controversy here is whether there should actually BE student loans, or whether this discourages the working class students. There is no suggestion that the government are getting involved in student selection. I repeat, why on earth would they?


You don't have to second guess worst case scenarios. They have stated many times over that their main objective is the redistribution of wealth. To believe they would abandon that philosophy and establish a system that doesn't "nudge" (their term) things in that direction is blind naivety. That's just how they want the masses, to accept everything without question or objection. Remember how the world was going to end if all this wasn't passed in the first couple of month's in power. There are no bounds to what they will say or try, to acheive their objectives.
Wow...the paranoia is unbelievable.
Here in the UK we have a Labour government - totally committed to the redistribution of wealth in their founding articles. WAY more socialist than the Democrats in your country.
Does that mean that they use student loans to discriminate? Of course it doesn't. There is nothing naive in my view - it is based on cold hard facts.
jwellsy
The National Socialists in power in DC are not main stream democrats. The socialist leaders around the world are evenious of this bunch. It's not paranoid, just facts.
Bikerman
jwellsy wrote:
The National Socialists in power in DC are not main stream democrats. The socialist leaders around the world are evenious of this bunch. It's not paranoid, just facts.
Er...you have produced NO facts at all - just spurious and unsupported ad hominem attacks.
jwellsy
That depends on your perspective I guess. I'll try to do a better job of including specific links to their own words.
Bikerman
jwellsy wrote:
That depends on your perspective I guess. I'll try to do a better job of including specific links to their own words.
It's not a question of perspective - simply facts. You say that the 'National Socialists' in DC are envied by other left-wing leaders? Support it.
You think that the Obama move to centralise control over student loans will produce some bias in student selection? Support it.
All we have to date is very poor rhetoric.
As someone who is unashamedly 'left-wing' then I find the notion that Obama is a 'socialist' entirely laughable. On our UK 'scale' he would be free-market conservative.
Do you seriously think that Obama would institute a policy which gave loans to students from poor families whilst denying them to others? Wow, that is quite a conspiracy theory.
The simple fact is that student loans are offered to any student who meets the entry requirements - which are set by the colleges and universities, not by government. As far as I can see this new proposal merely ensures that shysters and loan-sharks are not going to make obscene profits from giving loans to students. It seems, in principle, very similar to the scheme here, and I think it would have been noticed if Government had tried to get involved in influencing who got loans. I certainly would be aware of it because I deal with prospective university students routinely.
It doesn't happen and it is not an issue.
ocalhoun
Bikerman wrote:
ocalhoun wrote:
Oops, that was a mistake... That particular one was poorly thought out, I was thinking more on the basis of ordinary loans, and forgot that college loans can't really expect any collateral.
Good. I accept that.
Quote:
To fix it, simply replace "low-income" with "high-risk". The government could mandate that loans be given to people with mediocre test scores, or to people with bad credit, giving the same results.
Why on earth should Government do that?


All it take is one study that finds that these 'high-risk' individuals are disadvantaged, and get to college far less often. (It'll help if you can prove that minorities are more often 'high-risk' than others.) Add that to a leader or group of leaders who want to be 'progressive' by helping them out, and you have a reason for the government to do that. Anybody who points out the downside of the plan can simply be denounced as a racist, which will force them to apologize, or discredit them, either of which will end their influence.
Bikerman
ocalhoun wrote:
All it take is one study that finds that these 'high-risk' individuals are disadvantaged, and get to college far less often. (It'll help if you can prove that minorities are more often 'high-risk' than others.) Add that to a leader or group of leaders who want to be 'progressive' by helping them out, and you have a reason for the government to do that.
Do what, exactly? Are you suggesting that the Government would take over admissions policy for students? Are you suggesting that the Government would refuse to give loans, based on anything other than the student being accepted on a course?
There are plenty of studies that show working class children are 'disadvantaged', but I really don't see what your point is. As I keep repeating - look at how this works in other countries.

Alternatively, show me where it says in the bill that the government will have some power of decision about who gets a loan and who doesn't. As far as I can tell it doesn't say any such thing - it simply cuts out the loan-sharks by providing funding centrally, rather than through the current Federal Loan system which recompenses private companies who offer the loans. Seems entirely logical to me.
ocalhoun
Bikerman wrote:
show me where it says in the bill that the government will have some power of decision about who gets a loan and who doesn't.

If it doesn't grant that power, then most of my fears are put to rest by a 'guarantee' that they won't do it. I'd hate to just 'presume' that they can't though.
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