Obama to sign new student aid initiative

[Modbert]

Didn't quite answer my question . . . but thanks. I"ll try and find the answer.

Oh. Maybe this will help.

Student Loans | Federal Perkins, FFEL or Stafford, Federal PLUS Loans and More

 

[del]

Here's a little clue.

It will be raised to 10% very quickly as the federal deficit worsens. The Treasury auctions are already requiring higher interest rates. Other rates will follow suit.

i thought it meant that the total payments couldn't be more than 10% of income of individual after graduation. whatever.

if i had it to do over again, i would be a licensed electrician rather than a BSEE. you meet a better class of people and the money's about the same.

It does.

What I'm wondering is suppose you graduate and get a job making say $30K w/20K to pay off in loans. This means your capped at $3,000/yr repayment. Suppose you win the lottery for $100K (just humor me). Does the 10% cap mean that you can't pay off the loan but rather, have to take 7 years or so to pay if off? Does the cap mean you can't pay the loans off early? Anyone know the answer to this?

i don't know the answer, but since lottery winnings are income for tax purposes, i'd think that your cap would be adjusted accordingly.

i'd also think that the gov wouldn't impose a penalty for early repayment, but it is a bunch of pols we're talking about, so who knows?

 

[DiamondDave]

Government is not and should never be your private lending institution... more bullshit from our power hungry government

These student loans were coming from the government to begin with.

And I don't agree with the fact that it has been that way... we should be out of that all together... what next, government auto loans? Government 'education' loans so you can go to stripper school?

 

[Modbert]

And I don't agree with the fact that it has been that way... we should be out of that all together... what next, government auto loans? Government 'education' loans so you can go to stripper school?

Do you understand the concept of a loan? Just curious.

 

[Zoom-boing]

Didn't quite answer my question . . . but thanks. I"ll try and find the answer.

Oh. Maybe this will help.

Student Loans | Federal Perkins, FFEL or Stafford, Federal PLUS Loans and More

From the link :

The United States Department of Education administers two Stafford Loan programs--the Federal Family Education Loan (FFEL) program, for which private lenders provide the funding and the William D. Ford Direct Loan program, for which the federal government provides the funding. Both programs allow students to borrow money for college.

This I did not know, I thought all Stafford Loans were gov't loans. So this private funding just got swallowed up by uncle?

I just reread the link . . . I guess the FFEL loans aren't considered Stafford loans?

 

[Ravi]

Government is not and should never be your private lending institution... more bullshit from our power hungry government

These student loans were coming from the government to begin with.

And I don't agree with the fact that it has been that way... we should be out of that all together... what next, government auto loans? Government 'education' loans so you can go to stripper school?

I seem to recall you mentioning that you had a student loan.

 

[rightwinger]

Great! Go into debt to the Feds for an overpriced education.

Have you ever wondered why college inflation is worse than health insurance inflation?

Do I detect some jealousy here?

 

[California Girl]

That's more jobs to go in the banking industry then. Good plan, increase the number of unemployed. Brilliant!

 

[Modbert]

From the link :

The United States Department of Education administers two Stafford Loan programs--the Federal Family Education Loan (FFEL) program, for which private lenders provide the funding and the William D. Ford Direct Loan program, for which the federal government provides the funding. Both programs allow students to borrow money for college.

This I did not know, I thought all Stafford Loans were gov't loans. So this private funding just got swallowed up by uncle?

Federal Family Education Loan Program - Wikipedia, the free encyclopedia

FFEL was initiated by the Higher Education Act of 1965 and is funded through a public/private partnership administered at the state and local level. In 2007-08, FFEL served 6.5 million students and parents, lending a total of $54.7 billion in new loans (or 80 percent of all new federal student loans). Since 1965, 60 million Americans have used FFEL loans to pay for education expenses.

On 24 April 2009, President Barack Obama called for an end to the FFEL program, calling it a wasteful and inefficient system of "taxpayers...paying banks a premium to act as middlemen -- a premium that costs the American people billions of dollars each year....a premium we cannot afford."

This is where the bank as a middlemen come in.

See this:

In the FFEL Program, private lenders make federally-guaranteed student loans to parents and students. A major difference between FFEL and the other major federal loan program (the Direct Loan program) is FFEL's use of government funds. Private lenders who make loans to students under FFEL receive subsidies from the federal government

This is what I was talking about earlier.

 

[Immanuel]

Government is not and should never be your private lending institution... more bullshit from our power hungry government

These student loans were coming from the government to begin with.

If that were the case then what part did the banks play in the first place?

I believe that the banks provided the cash for the loans... does that mean that the federal government is now going to start providing the cash with tax dollars? more borrowing? Tax credits to the institution?

Where is the cash for the loans going to come from if the banks are not involved?

And my impression from the OP is that repayment of the loan will be capped at 10% of income. Therefore if 10% of your income is less than the monthly interest charges you are going backwards not forwards on the loan at least until such time as that changes.

I'd like to know how this is going to save the government $68 billion over the next decade.

Immie

 

[Zoom-boing]

Government is not and should never be your private lending institution... more bullshit from our power hungry government

These student loans were coming from the government to begin with.

And I don't agree with the fact that it has been that way... we should be out of that all together... what next, government auto loans? Government 'education' loans so you can go to stripper school?

Do banks offer low interest student loans? We went with the subsidized Stafford loan because no interest has to be paid until 6 months after graduation.

 

[Modbert]

Do banks offer low interest student loans? We went with the subsidized Stafford loan because no interest has to be paid until 6 months after graduation.

Well, let's look at it this way. What bank is going to loan a 18 year old kid $20,000 a year for something that 50% end up dropping out of? (College).

The whole reason that the government has to get involved in the first place I assume (keyword assume) is that banks wouldn't take the risk in lending to college students in the first place. Which is why the Government gave money to the banks to do so.

Now the government is telling the banks that they're just going to do it themselves.

That's what I get out of this anyway. See Post #49 by the way.

 

[Modbert]

If that were the case then what part did the banks play in the first place?

I believe that the banks provided the cash for the loans... does that mean that the federal government is now going to start providing the cash with tax dollars? more borrowing? Tax credits to the institution?

Where is the cash for the loans going to come from if the banks are not involved?

And my impression from the OP is that repayment of the loan will be capped at 10% of income. Therefore if 10% of your income is less than the monthly interest charges you are going backwards not forwards on the loan at least until such time as that changes.

I'd like to know how this is going to save the government $68 billion over the next decade.

Immie

The banks provided no $$$ for loans if I am reading correctly. The bank were the middlemen. Now we're cutting out the middlemen and saving $60 billion over 10 years.

 

[RodISHI]

Bitch and moan why don't you? I read some where there is a lawsuit filed every two seconds in America. And one filed on one of every twelve adults. IMO we don't need more lawyers, judges, doctors, insurance guru's and bankers to rule over everyone while they fail to follow the rules that they make. Congress is full of them. SIG's. PACS and behind the scenes staffers who are paid $75,000 and up? WTH!!!

It's like a run away train that doesn't know there are cars and a caboose behind it. The banks and insurance companies have had a hold of the nut sack of this country long enough. It's like Rod said if Obama can get 'er done he (Rod) would have to take a hard look at joining the Democratic party. This is what it will take to clean up the mess in D.C.. And for what my opinion is worth to anyone who gives a shit it's about time we had a president and an administration who will take on these PACS, SIGS and big business. When the little guy is choked off the big guys are totally screwed. The big boys are busy conning and scamming everyone public and private for the corporate teat. They could give a shit about farming the money tree to death. And we the people, us, posters on here included are their money tree. We have to get off this credit, borrow into oblivion tomorrow never comes reality that has been staged for the past 40 years. Tomorrow came a long time ago people and there is a hell of a price to be paid for it. If you ain't got the money then go without until you get it! Your job may not last forever and neither will you.

I am hearing everyone bitch about the government. People we are the the government. It is time to act like it and take back the bureaucracies that have had a strangle hold on us for so long. The sooner the better.

 

[Immanuel]

If that were the case then what part did the banks play in the first place?

I believe that the banks provided the cash for the loans... does that mean that the federal government is now going to start providing the cash with tax dollars? more borrowing? Tax credits to the institution?

Where is the cash for the loans going to come from if the banks are not involved?

And my impression from the OP is that repayment of the loan will be capped at 10% of income. Therefore if 10% of your income is less than the monthly interest charges you are going backwards not forwards on the loan at least until such time as that changes.

I'd like to know how this is going to save the government $68 billion over the next decade.

Immie

The banks provided no $$$ for loans if I am reading correctly. The bank were the middlemen. Now we're cutting out the middlemen and saving $60 billion over 10 years.

I saw that in post #49, but I don't know that that is accurate. My previous understanding was that the banks provided the loans and the government subsidized and/or guaranteed the loans much as they do with VA loans.

I'm not certain of that and I am sure there are different programs so maybe I am thinking of a different plan.

Immie

 

[Zoom-boing]

Government is not and should never be your private lending institution... more bullshit from our power hungry government

These student loans were coming from the government to begin with.

If that were the case then what part did the banks play in the first place?

I believe that the banks provided the cash for the loans... does that mean that the federal government is now going to start providing the cash with tax dollars? more borrowing? Tax credits to the institution?

Where is the cash for the loans going to come from if the banks are not involved?

And my impression from the OP is that repayment of the loan will be capped at 10% of income. Therefore if your 10% of your income is less than the monthly interest charges you are going backwards not forwards on the loan at least until such time as that changes.

I'd like to know how this is going to save the government $68 billion over the next decade.

Immie

I know that Stafford Loans are gov't backed loans. We went with the subsidized loan because no interest had to be paid until 6 months after graduation.

I was under the impression that all these loans/grants (Pell grants, Stafford Loans, etc.) were loans from the bank but backed by the gov't and if someone defaulted it was the gov't at risk? That the banks were the 'middle man' so to speak. But with the banks we could choose which bank, which terms, etc. Now the gov't has taken them, and that choice, out of the picture.

 

[Soggy in NOLA]

I'm sure this will save us 3,000% just like Obamacare will!!!!!

 

[DiamondDave]

These student loans were coming from the government to begin with.

And I don't agree with the fact that it has been that way... we should be out of that all together... what next, government auto loans? Government 'education' loans so you can go to stripper school?

I seem to recall you mentioning that you had a student loan.

I had a HELOC I used for some education expenses that I incurred over my GI BIll

 

[Zoom-boing]

Do banks offer low interest student loans? We went with the subsidized Stafford loan because no interest has to be paid until 6 months after graduation.

Well, let's look at it this way. What bank is going to loan a 18 year old kid $20,000 a year for something that 50% end up dropping out of? (College).

The whole reason that the government has to get involved in the first place I assume (keyword assume) is that banks wouldn't take the risk in lending to college students in the first place. Which is why the Government gave money to the banks to do so.

Now the government is telling the banks that they're just going to do it themselves.

That's what I get out of this anyway. See Post #49 by the way.

That was my thought as well.

 

[Immanuel]

These student loans were coming from the government to begin with.

If that were the case then what part did the banks play in the first place?

I believe that the banks provided the cash for the loans... does that mean that the federal government is now going to start providing the cash with tax dollars? more borrowing? Tax credits to the institution?

Where is the cash for the loans going to come from if the banks are not involved?

And my impression from the OP is that repayment of the loan will be capped at 10% of income. Therefore if your 10% of your income is less than the monthly interest charges you are going backwards not forwards on the loan at least until such time as that changes.

I'd like to know how this is going to save the government $68 billion over the next decade.

Immie

I know that Stafford Loans are gov't backed loans. We went with the subsidized loan because no interest had to be paid until 6 months after graduation.

I was under the impression that all these loans/grants (Pell grants, Stafford Loans, etc.) were loans from the bank but backed by the gov't and if someone defaulted it was the gov't at risk? That the banks were the 'middle man' so to speak. But with the banks we could choose which bank, which terms, etc. Now the gov't has taken them out of the picture.

That is basically my understanding but I do not know where and how the FFEL applies in this manner. Maybe they are not touching Stafford Loans and Pell Grants, but this program will change?

Immie