Good News: Obama to Nationalize Student Loan Industry...

[OklahomaTuba]

Guess he wasn't watching TV last night...


Under the system proposed by Obama, the government would cut private lenders out of the picture entirely, setting the interest rates and collecting payments directly for all student lending.http://cnsnews.com/news/article/60074

[RUSH LIMBAUGH is my clone!]

They've still got 59

[Crucifax Autumn]

This one doesn't move me at all. I dislike the federal government AND banks so it really makes little difference to me who's making the loans.

[NormanPride]

How can he just cut people out of lending? I mean, is that constitutional? They're just loans, right?

[OUMallen]

This one doesn't move me at all. I dislike the federal government AND banks so it really makes little difference to me who's making the loans.

Hahaha excellent point. :)

[OUMallen]

What a cluster.

One could always take a loan from a private entity. The gov't can't stop that. It just won't be subsidized.

[JLEW1818]

add fuel to the fire

[Chuck Bao]

Seems like a good proposal to me.

The US government can borrow money cheaper than private banks and there should be some cost savings. Besides a government agency would have more incentive to collect back the loans than the private banks that were already guaranteed their money back by the government in case of default. Distribution isn't a problem since the vast majority of these loans are through the financial aid office of universities.

I thought a lot of you were railing against Washington and common sense solutions to cut costs and wastes.

Or, is it that you think that government borrowing costs are going up and student loans shouldn't be subsidized with fixed interest rates?

Okay, what did I miss?

[Bourbon St Sooner]

I wonder if the students will get as good a deal from the feds as Goldman Sachs and JP Morgan do? 0%? Yeah didn't think so.

[SCOUT]

Seems like a good proposal to me.

The US government can borrow money cheaper than private banks and there should be some cost savings. Besides a government agency would have more incentive to collect back the loans than the private banks that were already guaranteed their money back by the government in case of default. Distribution isn't a problem since the vast majority of these loans are through the financial aid office of universities.

I thought a lot of you were railing against Washington and common sense solutions to cut costs and wastes.

Or, is it that you think that government borrowing costs are going up and student loans shouldn't be subsidized with fixed interest rates?

Okay, what did I miss?
I am not sure the governments track record lends itself to operating anything cost effectively.

[Chuck Bao]

I wonder if the students will get as good a deal from the feds as Goldman Sachs and JP Morgan do? 0%? Yeah didn't think so.

I am not sure if they're using the discount window, but yeah.

[Chuck Bao]

I am not sure the governments track record lends itself to operating anything cost effectively.

Well on paper, it doesn't look like a bad idea. At least it SHOULD be better than the government underwriting any loss or default suffered by a private lender.

[OUMallen]

Well on paper, it doesn't look like a bad idea. At least it SHOULD be better than the government underwriting any loss or default suffered by a private lender.

True. I'm torn. It's a step in the right direction considering where things stand now...but it's just more government regulation and control, too, which many of us (myself included) fundamentally oppose.

But as a consumer of student loans that have been subsidized...I dunno. I like my low interest rates.

[Bourbon St Sooner]

Well on paper, it doesn't look like a bad idea. At least it SHOULD be better than the government underwriting any loss or default suffered by a private lender.

Yep, pretty much a non-issue here. There's an argument to be made that the banks are more efficient at administering a consumer lending program, but the gov't is nothing but a big transfer payment machine anymore.

[yermom]

What a cluster.

One could always take a loan from a private entity. The gov't can't stop that. It just won't be subsidized.

i got a loan from a private bank, but it was sold to Sallie Mae anyway

[Okla-homey]

The problem with this is there will be strings. I suspect the inevitable federal regulations will require issuance of student loan funds to people who have no realistic potential of repaying them. Like Fine Arts, Sociology and French Literature majors.;)

[Crucifax Autumn]

Well shat...Look how many of them don't get repaid anyway...and many of them are government guaranteed and subsidized anyway aren't they?

[bluedogok]

How can he just cut people out of lending? I mean, is that constitutional? They're just loans, right?
Since when does an old piece of paper restrict what the gov't can and can't do....
They haven't paid attention to that document for a long time.

[LosAngelesSooner]

The problem with this is there will be strings. I suspect the inevitable federal regulations will require issuance of student loan funds to people who have no realistic potential of repaying them. Like Fine Arts, Sociology and French Literature majors.;)
I was a Fine Arts major.
I had no problem repaying all my loans.
And I went to very expensive schools.

[Crucifax Autumn]

But you're special and stuff!

[LosAngelesSooner]

Nah. I just work my damn *** off.

[Crucifax Autumn]

In today's society, working your *** off IS special! lol

[RUSH LIMBAUGH is my clone!]

i got a loan from a private bank, but it was sold to Sallie Mae anywayIOW, you've been repaying to an individual?

[OU_Sooners75]

YAY for Socialism!!!!

[tommieharris91]

Well shat...Look how many of them don't get repaid anyway...and many of them are government guaranteed and subsidized anyway aren't they?

Ohh no. It takes REALLY special circumstances for student loan debt to be forgiven and erased.

[yermom]

IOW, you've been repaying to an individual?

i guess Sallie Mae isn't a GSE anymore like Fannie Mae or Freddie Mac

[TheHumanAlphabet]

Seems like a good proposal to me.

The US government can borrow money cheaper than private banks and there should be some cost savings. Besides a government agency would have more incentive to collect back the loans than the private banks that were already guaranteed their money back by the government in case of default. Distribution isn't a problem since the vast majority of these loans are through the financial aid office of universities.

I thought a lot of you were railing against Washington and common sense solutions to cut costs and wastes.

Or, is it that you think that government borrowing costs are going up and student loans shouldn't be subsidized with fixed interest rates?

Okay, what did I miss?

Why does the government need to "borrow" money (when we have a huge deficit) to lend out to students. The deal will incentivize the government to make loans at APRs that may not be competitive so they can realize a profit in the difference of the real interest rate vs. loaned interest rate. They will want to set that number high enough to profit and not get hit by the loss on the defaulted loans and if the interest rate goes above their offered rate. Plus we will be adding a whole other agency to process, service and quality control the loans. We can't seem to do that well with the gov't issued credit cards to gov. employees...

[OUMallen]

I was a Fine Arts major.
I had no problem repaying all my loans.
And I went to very expensive schools.

Yippee skippee, he still has a point.

[jkjsooner]

How can he just cut people out of lending? I mean, is that constitutional? They're just loans, right?

Other than being subsidized, they would probably lose their protection in bankruptcy (student loans can't be discharged in bankruptcy).

[jkjsooner]

I am not sure the governments track record lends itself to operating anything cost effectively.

What they are not good at is controlling the cost of whatever the borrower is needing.

The government has a good way of creating "affordability" measures that in long term do the exact opposite. Whether it be housing or tuition, the government affordability measures have 1) made these more available but 2) created a generation of debt slaves who paid multiple times more for these products/services than previous generations did.

[jkjsooner]

I am not sure the governments track record lends itself to operating anything cost effectively.

I think the government is fairly efficient at lending. What they are not good at is controlling the cost of whatever the borrower is needing.

The government has a good way of creating "affordability" measures that in long term do the exact opposite. Whether it be housing or tuition, the government affordability measures has 1) made the products/serivces more available but 2) created a generation of debt slaves who paid multiple times more for these services than previous generations did.

[LosAngelesSooner]

Yippee skippee, he still has a point.If his point is that making vast generalizations often come back to bite you in the *** and make you look stupid, then yes...he does.