Obama signs bipartisan transportation, student loan bill

  1. 1 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." ...

    http://www.cnn.com/2012/07/06/politi...ill/index.html
  2. Visit  herring_RN profile page

    About herring_RN

    herring_RN has '>40 years' year(s) of experience and specializes in 'Critical care, tele, Medical-Surgical'. From 'California, USA'; Joined Mar '04; Posts: 14,013; Likes: 25,060.

    23 Comments so far...

  3. Visit  tntrn profile page
    1
    Hillsdale College - Imprimis Issue


    A very interesting read about the student loan program.....information few, I am betting, know about.
    tewdles likes this.
  4. Visit  Tweety profile page
    1
    Quote from tntrn
    Hillsdale College - Imprimis Issue


    A very interesting read about the student loan program.....information few, I am betting, know about.
    I always thought the student loan issue was political. No one during an election cycle was going to allow the rates to go up, even though payments by individuals wouldn't have gone up much.

    I disagree that the Pell Grant is now a middle class entitlement, because in the next statement he states how much loan debt has gone up. Why would students loans skyrocket if pell grants were readily available to all the middle class? Pell grant use has gone up because the economy tanked and more kids qualified as their parents become unemployed.

    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.
    Joe V likes this.
  5. Visit  tntrn profile page
    2
    Agree with you, Tweety. The piece also states that many of the outstanding loans are now held by those who are over 40....so it's not only kids getting them.
    Joe V and Tweety like this.
  6. Visit  heron profile page
    2
    After a quick skim of tnt's article, I'm interested to note that nowhere does it mention the role of for-profit institutions, many of which are owned by the likes of Goldman-Sachs. I still have to think about the essay a bit before I comment on his arguments, but I think this needs to be considered as well:

    U.S. GAO - For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices

    Undercover tests at 15 for-profit colleges found that 4 colleges encouraged fraudulent practices and that all 15 made deceptive or otherwise questionable statements to GAO's undercover applicants. Four undercover applicants were encouraged by college personnel to falsify their financial aid forms to qualify for federal aid--for example, one admissions representative told an applicant to fraudulently remove $250,000 in savings. Other college representatives exaggerated undercover applicants' potential salary after graduation and failed to provide clear information about the college's program duration, costs, or graduation rate despite federal regulations requiring them to do so.
    http://www.republicreport.org/2012/w...t-kaplan-alec/

    For-profit colleges are the ultimate special interest. Many receive around 90 percent of their revenue from federal financial aid, more than $30 billion a year, and many charge students sky-high prices. In recent years, it has been fully documented that a large number of these schools have high dropouts rates and dismal job placement, and many have been caught engaging in highly coercive and deceptive recruiting practices. Yet when the bad actions of these predatory schools got publicly exposed, the schools simply used the enormous resources they've amassed to hire expensive lobbyists and consultants, and to make campaign contributions to politicians, in order to avoid accountability and keep taxpayer dollars pouring into their coffers.
    http://www.nytimes.com/2011/08/09/ed...forprofit.html

    The Department of Justice and four states on Monday filed a multibillion-dollar fraud suit against the Education Management Corporation, the nation's second-largest for-profit college company, charging that it was not eligible for the $11 billion in state and federal financial aid it had received from July 2003 through June 2011.

    While the civil lawsuit is one of many raising similar charges against the expanding for-profit college industry, the case is the first in which the government intervened to back whistle-blowers' claims that a company consistently violated federal law by paying recruiters based on how many students it enrolled. The suit said that each year, Education Management falsely certified that it was complying with the law, making it eligible to receive student financial aid.

    "The depth and breadth of the fraud laid out in the complaint are astonishing," said Harry Litman, a lawyer in Pittsburgh and former federal prosecutor who is one of those representing the two whistle-blowers whose 2007 complaints spurred the suit. "It spans the entire company-from the ground level in over 100 separate institutions up to the most senior management-and accounts for nearly all the revenues the company has realized since 2003."
    Elvish and herring_RN like this.
  7. Visit  Jolie profile page
    2
    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
    Joe V and Tweety like this.
  8. Visit  Jolie profile page
    2
    Quote from tntrn
    Agree with you, Tweety. The piece also states that many of the outstanding loans are now held by those who are over 40....so it's not only kids getting them.
    Do the 40-somethings have newly issued loans, or are they still paying off their college loans from 20 years ago?
    tewdles and Tweety like this.
  9. Visit  tntrn profile page
    0
    Quote from Jolie
    Do the 40-somethings have newly issued loans, or are they still paying off their college loans from 20 years ago?
    Good question, and I don't know. But there is a problem with student loans. That is clear.
  10. Visit  herring_RN profile page
    0
    The new law keeps the interest rate low on school loans. What is wrong with that?

    Can anyone empathise with the posters to this thread? -- Cartoon: Student loan taking forever to pay off...
  11. Visit  tntrn profile page
    0
    Quote from herring_RN
    The new law keeps the interest rate low on school loans. What is wrong with that?
    Nothing wrong with that.....but when student are borrowing huge amounts that include funds for expenses other than tuition, books and fees (see Jolie's post above), pizza from delivery all the time instead of dorm food, it becomes a huge problem when time to pay back arrives.
  12. Visit  Jolie profile page
    2
    Quote from herring_RN
    The new law keeps the interest rate low on school loans. What is wrong with that?

    Can anyone empathise with the posters to this thread? -- Cartoon: Student loan taking forever to pay off...
    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.
    herring_RN and Tweety like this.
  13. Visit  Tweety profile page
    1
    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
    tewdles likes this.
  14. Visit  RN 033 profile page
    1
    I'm a single mom, 40+something that used student loans to complete my RN-BSN degree. I didn't think I would have a problem repaying with a nurses salary. Still no job after 1 1/2 years from getting my RN license. I wish that I would've used my credit cards...bankruptcy won't remove student loans.
    Not_A_Hat_Person likes this.


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