Imagine a bill that would cut student loan costs by $60 billion over 10 years and use those savings to help more students be able to go to college through the Pell grant program. That's nothing short of amazing!
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When I was a college student my student loans came with a 10%* penalty. If I borrowed $1000 I only received $900. At the time I thought this was ridiculous because the title was the "GUARANTEED Student Loan" program... meaning that if the borrower defaulted the government would make it up. Hence there was no reason for the bank to charge me 10% and I should have had a really low interest rate (not 9%) because the payment was guaranteed.President Clinton tried to clean up this mess but was hit by the pro-bank lobby who didn't want to let go of this cash cow.
Attached to the bill-whose-name-I-cannot-speak is a reform that takes banks out of the picture entirely. The savings - $60 billion over 10 years - would be funneled into the Pell grant program to help the poorest students get a few extra bucks towards tuition.
This is a completely under-reported story but the effects on college education will be instantly noticeable.
*I confess that I cannot guarantee that the penalty in my era was 10%. It may have been a little less or a little more. As a geek I'm embarrassed that I cannot recall the exact number.
I deleted a comment from "John Boehner" because it was factually incorrect. If someone is willing to sign their own with factually incorrect stuff I'll be happy to leave it up.
ReplyDeleteI want comments so I try to make it as easy as possible to put them up and I do not delete comments that are critical... if they are signed by someone I actually know.
Since so few actually give comments anyway I will probably move to a system where you have to have an account to make a comment. That will keep away the comments from John Boehner and Rielle Hunter... who are more creative than the completely anonymous negative commenters.