Obama signs bipartisan transportation, student loan bill
President Barack Obama signed on Friday a transportation funding and student loan bill which passed Congress last week in a rare election-year compromise between Republicans and Democrats.
In an unusual show of bipartisanship, members of both parties were on hand for the White House ceremony, including members of the administration, Congress, as well as state and local governments.
"This is an outstanding piece of business. And I'm very appreciative of the hard work that Congress has done on it. My hope is that this bipartisan spirit spills over into the next phase," Obama said, encouraging members to pass larger infrastructure measures and "start doing more to reduce the debt burden that our young people are experiencing." ...
... After the law passed, the top two senators involved in the negotiations -- Barbara Boxer, a California Democrat, and James Inhofe, an Oklahoma Republican -- released a joint statement praising the bipartisan work.
"This bill will keep thousands of construction workers on the job rebuilding our nation's infrastructure," Obama said on Friday. "This bill will keep interest rates on federal student loans from doubling this year, which would have hit nearly seven and a half million students with an average of a thousand dollars more on their loan payments." ...
Jul 7, '12
Quote from Tweety
A lot of students aren't using common sense and banks and parents should advise kids that it's not wise to take out more money than they need. Kids are using it to pay rent on apartments when they should live in dorms, by groceries and pay high cell phone bills, etc.
Why does the "system" allow this to happen? If I am approved for a car loan, the agency loans me only enough money to purchase the vehicle. There is no possibility of "padding" the loan to pay for living expenses, entertainment, not even gas or insurance related to the car. That is an important difference between safeguards taken private enterprise versus lack of safeguards taken by government agencies engaged in similar types of commerce.
Why in the world does the student loan system allow money to be borrowed beyond the cost of tuition, fees, books, and possibly very modest living expenses, if the student must live away from home during the school year? My scepticism causes me to believe that the administrators of this program are not opposed to over-borrowing, abuse and waste.
2 of the most interesting points in tnt's article were: College loan debt now exceeds credit card debt in this country, and The overspending of student loan holders follows similar patterns to overspending in the healthcare system by individuals with third party reimbursement, explained by the "insulation" these groups have from immediate responsibility for repaying their own expenses.
This is a valid concern raised by fiscal conservatives in relation to the government student loan program as well as the upcoming implementation of Obamacare.
Last edit by Jolie on Jul 7, '12
Jul 7, '12
Quote from Jolie
The law prevents the planned increase in interest rates from going into effect. Interest rates would have doubled from approximately 3.4% to roughly 6.8%. I read in one article where that amounted to an average of approximately $20 per month in savings for loan holders. While $20 is not chump change, I think the far greater issue facing these loan holders is the poor economy which is preventing many from finding gainful employment in their professional fields. If they were able to earn the professional salaries they had anticipated upon graduation, a planned $20 increase in loan fees per month would not have warranted a public outcry.
Agree. While I sympathize, the low interest rates weren't meant to last forever and the individual cost per loan should be management IMO. It only goes to show it was clearly a political move, particularly by the Democrats, but also from the party that was quick to want to allow unemployment benefits to expire, and is all about cutting the deficit.
About why it's allowed to happen that students are allowed to take on more debt than they need or can handle, it's reminds of the mortgage crises and the writing of loans for folks that couldn't afford it....probably the root is greed. There I go "vilifying the rich" again. Of course, like I said parents, the students, and administration plays a role in how they advise them. When I took out my loans for my BSN they only allowed X amount and that was it..not above and beyond as the school presumed we were working RNs (nursing was their only program). But when my ex was getting his masters he took out an extra $10,000 just because he could.
Last edit by Tweety on Jul 7, '12