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Saturday, October 1, 2016

Why does the government give the big banks a better deal than it gives students?

It’s question so perfect that people can’t stop talking about it.

The first standalone bill from Senator Elizabeth Warren (D-MA) would not only prevent student loan rates from doubling, it would cut them down to the same rate the Fed charges banks to borrow money overnight for the next 12 months. And the idea has taken off like wildfire, with more than 400,000 people signing on to support the legislation.

Many — including Campaign for America’s Robert Borsage, who calls it “a subsidy in America’s future” — are praising Warren’s temporary proposal as a perfect short-term bailout for graduates who are suffering disportionately in our slow recovery.

But “serious” policy minds aren’t pleased, and are trying to trigger a backlash against Warren’s proposal.

“Sen. Warren’s proposal should be quickly dismissed as a cheap political gimmick,” writes the Brookings Institution’s Matthew M. Chingos and Beth Akers.

“With that mix of populist rhetoric and subterfuge, Senator Warren stands to whip up a mob of angry students (and pundits) who will demand that the government drop the interest rate on student loans to 0.75 percent,” Yahoo! Finance’s Jason Delisle. “Good luck reasoning with a mob.”

Getting a mob interested in student loan debt is exactly what Warren intended to do — and it’s working.

With more than one trillion dollars in student loan debt, the economy is increasingly stifled by the burden on young people coming to age in the midst of the Great Recession.  Immediate and decisive action is necessary.

  • This fake Indian couldn’t pass an econ 101 course. Makes ya sick !

    • InsideEye

      Everyone should state that they are from the Nimiipuu Nation or even better yet from Kenya or even better than that , a terrorist and then you can get a free ride certainly through Columbia University and then of course Harvard. I personally would forgive all student loan and make Banks make up the difference since Jamie Dimon /Jp Morgan Chase misplaced close to $1 Trillion…this is small change to our economy apparently…… All SSN Medicare and Health care and Political fund raising should be gotten from general government funds…What ever is left over should pay journalist and IRS for ten years so that they can find other employment……. enough politicizing these things. think of how quiet Sunday TV mornings would be !!!!!

      • Tatxinmapu

        Nimiipuum temine! Tacnix. Yep. Fix it on the backs of those who scandalously milk the average American.

        • InsideEye

          Everyone gets a hand out / bail-out except the working class. we support both ends of the spectrum and We all are left with the bill,…. tuition and housing…. after being run-up by the bottom and top feeders who were freed of responsibility for their actions.

    • browninghipower

      And you could, moron?

  • Mike

    At issue really is not the loan process or the borrower, it is the colleges and universities that charge outlandish tuition because they can.

    Simply,I never hear much carping about the cost of higher ed., except to say that it is expensive. Can it really be that tuition and fees have gone up so high, or is it not the realization, that student loans are easy and plentiful, so, why not charge more money since it can be borrowed to pay the bills. Consider, in 1970, the out of state tuition for one semester at West Virginia University, Morgantown, was $325.00 Today, $18,000 plus. Do we really think that a 5,000 percent increase is just inflationary? No, I am not suggesting that $325.00 is the proper number either.

    I think Ms. Warren is a disaster, but in this instance, lets aim at the real target, Universities with run away budgets and endowments that in some instances, reach near a billion, yet, still continue to gouge the student, because they can.

    • mah101

      Mike, the colleges and universities aren’t charging higher tuition because “they can get it”, they are trying to make up for the massive cuts in state funding that have taken place during the past decade.

      You should check to see what percentage of the funding for your “State” universities actually comes from the state – you might find it to be in the single digits. States have dramatically shifted the burden of education to the individual students.

      Now, to be fair, the Universities have built up a large infrastructure of administration that could be cut, but again that is in response to many state mandates, expectations, and reporting and funding requirements needed to maintain what little amount of funding IS coming from the state.

      You misplace the problem when you go for the easy “Universities with run away budgets”! They are struggling to survive at a time when states have decided that it is not worth their money to educate the next generation.

      • InsideEye

        I think Mike is more correct on this, My tuition was only $500/semester then, now it would have been $38000/yr. There was no overnite cutback of Government aid back then….. to make tuition this high. I was able to get through graduate and medical school totally paid for by myself and working. Back then 6-10K was a good yearly middle class salary…..that translates to salary 228K today ..median salary…this certainly is not todays median salary for middle class workers!!!!. Buying power has eroded due to taxations for entitlements….think about that.

        • mah101

          Even according to a study done by the National Association of State Budget Officers, the results are clear. State funding for higher education is lower now than at any time in the past 30 years or more. In fact, according to their data, states spend more per prisoner for corrections than they do per student for higher education.

          Universities have tried to make that up through tuition increases, but that is not a sustainable model either. States must change the way they are currently funding higher education, or the burden will continue to shift to the students.

          • InsideEye

            Tis my point, we are paying for services not needed or too much for prison care and other politically correct stuff. I assure you if you paid for your own birth control/condoms you would be more carefull in controlling you passions….rambling. Suppose we had an extra 20-30 K in our pockets we would make the better choices… assuming we were all at the median of 200K. but we did not even keep up with tuition increases. Tuition increased 38X ..our salaries did not do so over the years., even if it did, the extra taxes….. had eaten into it.

          • mah101

            Inside, condoms aren’t covered by medical insurance, and there are widespread and valid medical reasons for birth control being available for women other than simply control over reproduction. Not to mention that control of reproduction has a significant impact on women’s quality of life.

          • InsideEye

            Would you not concede that 99% of “Health Issues” are for remediation of pregnancy.

          • mah101

            I find this to be a spurious argument when the topic is access to education. I do not agree that we are a society that must choose between health care and education. We invest in our people – they are our greatest wealth and source of future prosperity. To do otherwise is harmful, poor policy, and a response to misplaced causality.

            I do not know what percentage of health issues are treated with birth control hormones. However, I personally have known several women who have taken birth control pills in order to regulate endometriosis. Further, I find that the ability to control their own reproduction provides opportunities for women to reach other potentials and provide other benefits to society.

            It seems your argument is predicated on a belief that it is so called “entitlements” that are at the heart of our financial problems. That would be misplaced causality as well.
            Can those programs be reformed? Sure. Are we really a nation of moochers looking for our handout? No.

            We are a nation that benefits when all have access to health care. When all have access to education to develop their potential. When all have the ability to grow, prosper, and contribute.

            It is my firm belief that investing in our people, their education, their opportunities, their health, is at the heart of our prosperity.

          • InsideEye

            I agree. it slipped in as a side issue, But …Womens health care is taken care of by normal health insurance. I see abortion as a political tool and is used mainly as a way to correct failed contraception…..although I do also think it is a right for a woman to choose this. ….but it is not a Right as an entitlement.

          • mah101

            Fair enough, Inside. I respect your willingness to discuss the issue.

        • Mike

          My last word on this.

          I teach in a University in Asia. I can’t speak to Europe and I can’t generalize to all of Asia, but I can say that, In Thailand, Korea, Japan, universities do not resemble anything like our Institutions of higher learning. Mostly, the physical plant is akin to a high rise office building and is designed for classroom work. Amenities are sparse and the focus is narrow.

          Don’t misunderstand, like most else in the USA now, it has just gotten to the point that things are not sustainable. The State University system in the Big Ten, UC System in California, and Southwest are absolutely things of beauty. Massive structures, the best of everything. Upkeep has got to be horrific, cost wise.

          We like it that way. Sadly, the average kid can’t attend without indebtedness for life. I am not saying Cal Berkeley is an entitlement, because it is not, yet, soon, all the luxury will be at the point of diminishing returns for most students.

          It may be there now.

          • InsideEye

            Great perspective! my contention is that teachers are blamed for student failures….students should be blamed for lack of focus. All that is required initially is read, write and a candle like Abraham Lincoln….. the other beautiful campus stuff is really a resort for many. with todays access to ipads….a virtual library ….we need less educational resorts. and teachers also can better focus on harder concepts.

      • sigrid28

        Well then, how can they afford to pay football coaches millions of dollars and sustain such huge sports budgets?

    • Allan Richardson

      The main reason the cost of education is going up is that, in order to be counted as “accredited” toward getting a job, a certain number of contact hours with a highly paid professional in the same room at the same time must be paid for. In other words, unlike widget making, or even hotel reservations, the process has not been automated. Even the “online” classes, if offered by the universities that have decent academic reputations, charge the same as in-person teaching.

      But the biggest obstacle is that everything revolves around the academic CALENDAR. If someone learns 90 percent of what is needed for an A grade in the first 50 percent of the term, but then has to leave school for a personal reason (job reassignment, sickness, another family member’s sickness, etc.), the student FORFEITS the PAID TUITION, receives an F (unless the dean feels sorry for him), and has to wait until the next start of term window to re-enroll, gets no credit for the 90 percent already learned, has to PAY MORE TUITION, and the grade for the retry is AVERAGED in with the F grade from the first try. The academic calendar was fine for young people supported by parents, but for today’s “non-traditional” student trying to get an education while working, raising a family, and possibly fighting illness, the calendar puts education out of reach. Therefore, these students never BECOME students.

      Many skills can be learned, and certified as learned, without a series of classroom sessions starting and ending on arbitrary dates: driving and radio licensing (even commercial broadcast techs) come to mind easily. Even “soft” and “humanistic” classes can be learned by a mixture of reading and “bull sessions” with peers and teachers, and teachers can verify satisfactory completion with a combination of a few hours of interviews and a written essay. If I were to take a class in theology, for example, and could only view recorded or online videos, discuss ideas about the subject with other students in my area who viewed the same material, and at the end write an essay on a topic posed by the professor, then discuss my essay and other topics for four or five hours (ONE trip to the campus!), the professor could surely judge accurately whether I had actually learned the material and, more important, understood the world views of the thinkers cited in the course. This could be done MUCH less expensively than traditional courses, and WITHOUT a fixed calendar.

      I do not know why you believe Sen. Warren is a “disaster” unless you are a greedy banker trying to get away with cheating your customers. Please explain in detail why you would prefer the Tea Party puppet she replaced. Or do you WANT a Tea Party puppet?

      • Mike

        Nonsense…

        Where did you attend? Illness or legitimate reason will get you (I) incomplete. Additionally, what ever happened to expected attendance. Four years used to be plenty to graduate, but today, five or so ought to do it, I hear.

        Your argument is weak and your thesis is way off topic.

        Cost is the topic as I see it, and Ol Liz is ridin to the rescue with misdirected problem solving.

        I am sure YOU remember Bill Clinton’s famous chant, “It’s the economy stupid!” well I say to Ol Liz, “It’s the tuition stupid”

        Tea Party my arse.

      • sigrid28

        I read the Chronicle of Higher Education, where statistics demonstrate that the cost of facilities and highly paid administrators long ago outstripped salaries of faculty, 60% of whom are part-time adjunct professors making below minimum wage with no benefits. Within community colleges, which are doing very well, a retired sixth grade teacher with a B.A. or B.S. is deemed of more value in bringing unprepared high school grads up to college level than a person with graduate education. There, too, adjunct professors are the rule rather than the exception. The same corporate model has driven the final vestiges of merit pay and hiring out of elementary and secondary education (which is why remedial courses are needed on the college level): Inexperienced new hires can be replaced at will, like part-time employees in retail settings or fast food. Under these circumstances, Senator Warren’s proposal seems like a breath of fresh air, a little fairness for once to benefit the next generation.

  • The more I read about Elizabeth Warren, the more convinced I am that she should run for President in 2016. She is intelligent, she is determined to help those who need help, she is not afraid of the crooks that brought our economy down to its knees, and she has the character needed to engage the minions that tow the line for the elite at the expense of the poor and the middle class. We need more people like Elizabeth Warren in Congress, and we need her as our nominee for President or VP in 2016.

    • Allan Richardson

      Plus, there is something that has not happened since our first President left office in 1797 that would happen if Senator Warren became our next President, assuming the present Queen of the UK remains healthy: both our countries would have leaders with the same first name! How wonderful it would be for Liz to visit Liz, either in Washington or in London!

      More seriously, she is a well qualified candidate for either office. Whether she feels she would be READY, and WANTS to be President, is another matter. Before Barack Obama was elected, I was beginning to feel that some commission should be set up to find someone who does NOT want the office and give it to that person, since the ones who DO want it seem to mess it up most of the time. Presidency like jury duty, maybe?

    • sigrid28

      I’d just be happy if we could get her into the position of top leader of the Senate. Let her fix the filibuster rules to prevent their abuse. I’ll bet she could get legislation moving along to the floor without so much delay. Unlike Reid, she is not beholden to the NRA

  • hjs3

    Lotta stupid served for breakfast here this morning I see…

    • Mike

      Heck yeah!!!!

  • Budjob

    Christ,I hope Bernie Sanders and Liz Warren are a team in the 2016 Presidential election.This country sure needs these two responsible,intelligent individuals to represent the interests of the average person.Of course,many of the Republicans if not all of them want nothing to do with people that exercise common sense while governing!!

    • JSquercia

      My Dream Ticket !!!!!

      • You too.

        • Budjob

          And you dogood are one of two things,a fucking idiot or,a sniveling,lying,conniving,devious motherfucking Republican!!

          • You can’t possibly be as stupid as this comment makes you sound. Then again maybe your are.

    • You have smoked way too much dope.

  • montanabill

    Why stop with students? Shouldn’t we all get to borrow government money for 0.75%? I mean we are either borrowing from ourselves or foreign countries and we don’t intend to pay it back anyway.