White House Petition to Lower Student Loan Interest Rates

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drinion
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White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 9:27 pm

"WE PETITION THE OBAMA ADMINISTRATION TO: Lower the Interest Rates of Federal Student Loans.

We ask that the federal government stop making a profit from the educational and professional pursuits of this country's middle-class. The cost of higher education is at an all-time high, and many members of the middle-class are only able to educate themselves with the help of federal student loans. According to the Huffington Post, the government has kept the interest rates of these loans well above the rates that are necessary to pay for its costs. In fact, the government expects to make $33.5 billion from last year's loans alone. Was the government's profit worth the cost of unnecessarily sacking the middle-class with a bill of $33.5 billion? No. The administration should stand with the middle-class and start fighting to lower the interest rates of federal student loans. Thank you."

Here's the link to the petition: http://wh.gov/MhDr.

Here's the article referred to in the petition: http://www.huffingtonpost.com/2013/04/0 ... 48216.html.

It's time to start negotiating with our lenders, not just our schools!

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nickb285
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Re: White House Petition to Lower Student Loan Interest Rates

Postby nickb285 » Thu Apr 11, 2013 9:39 pm

Does TLS have 99,998 members?

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 9:44 pm

nickb285 wrote:Does TLS have 99,998 members?


It's written broadly enough to attract undergrads and grads, so hopefully it doesn't matter. What does matter is that you sign it if you think it's worth signing.

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sinfiery
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Re: White House Petition to Lower Student Loan Interest Rates

Postby sinfiery » Thu Apr 11, 2013 9:48 pm

If this gets passed, it will likely only lower interest rates on undergrad loans.

I'm willing to bet the profit they make from student loans is definitely one source of income they use to fund PAYE

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 9:51 pm

sinfiery wrote:If this gets passed, it will likely only lower interest rates on undergrad loans.

I'm willing to bet the profit they make from student loans is definitely one source of income they use to fund PAYE


It's just a petition to try to get the issue some attention, especially with shortages of lawyers in rural and less well-to-do areas. If you price gauge middle class people going into law school, you make it hard for them to afford to work it places like that.

See: http://www.nytimes.com/2013/04/09/us/su ... wanted=all

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drmguy
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drmguy » Thu Apr 11, 2013 9:55 pm

Too bad eliminating a profit would be seen as incurring a cost.

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MyNameIsFlynn!
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Re: White House Petition to Lower Student Loan Interest Rates

Postby MyNameIsFlynn! » Thu Apr 11, 2013 9:55 pm

This sounds like a great idea! It's not like below-market interest rates are partially responsible for the rapid increase in tuition in the past few years. So if we cut borrowing rates even further, putting more money in students pockets, there's no way schools will take advantage of lower borrowing rates to increase their tuition even further!!

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 9:57 pm

drmguy wrote:Too bad eliminating a profit would be seen as incurring a cost.


You're talking about a cost for the government, which is no the cost referred to in the petition.

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 9:59 pm

MyNameIsFlynn! wrote:This sounds like a great idea! It's not like below-market interest rates are partially responsible for the rapid increase in tuition in the past few years. So if we cut borrowing rates even further, putting more money in students pockets, there's no way schools will take advantage of lower borrowing rates to increase their tuition even further!!


So you would prefer them to increase the rates?

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drmguy
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drmguy » Thu Apr 11, 2013 10:01 pm

drinion wrote:
drmguy wrote:Too bad eliminating a profit would be seen as incurring a cost.


You're talking about a cost for the government, which is no the cost referred to in the petition.

Huh?

In this political climate, not many congress people are going to look kindly on losing revenue, especially revenue coming from a politically weak group.

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sinfiery
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Re: White House Petition to Lower Student Loan Interest Rates

Postby sinfiery » Thu Apr 11, 2013 10:02 pm

Lowering interest rates will be funded either by removing money allocated to programs like PAYE or raising taxes.


Profits from student loans are generally used as an incentive to fund repayment programs for those who cannot afford to repay their own dischargable student loans or those who want to pursue a higher public interest in lieu of large stacks of cash and can only do so with government aid.

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 10:04 pm

drmguy wrote:
drinion wrote:
drmguy wrote:Too bad eliminating a profit would be seen as incurring a cost.


You're talking about a cost for the government, which is no the cost referred to in the petition.

Huh?

In this political climate, not many congress people are going to look kindly on losing revenue, especially revenue coming from a politically weak group.


The point is that students aren't a politically weak group, especially after Obama's two elections.

Economically and sociologically it is also important for society to have a financially sound middle class, which high student debt levels (partially the result of high interest rates) undermines.

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MyNameIsFlynn!
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Re: White House Petition to Lower Student Loan Interest Rates

Postby MyNameIsFlynn! » Thu Apr 11, 2013 10:05 pm

drinion wrote:
MyNameIsFlynn! wrote:This sounds like a great idea! It's not like below-market interest rates are partially responsible for the rapid increase in tuition in the past few years. So if we cut borrowing rates even further, putting more money in students pockets, there's no way schools will take advantage of lower borrowing rates to increase their tuition even further!!


So you would prefer them to increase the rates?


Ideally I would prefer the government get out of the education loan industry entirely. That's not politically feasible, so yes, I would like to see the USED adjust rates to bring them in line wth the private sector.

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 10:08 pm

MyNameIsFlynn! wrote:
drinion wrote:
MyNameIsFlynn! wrote:This sounds like a great idea! It's not like below-market interest rates are partially responsible for the rapid increase in tuition in the past few years. So if we cut borrowing rates even further, putting more money in students pockets, there's no way schools will take advantage of lower borrowing rates to increase their tuition even further!!


So you would prefer them to increase the rates?


Ideally I would prefer the government get out of the education loan industry entirely. That's not politically feasible, so yes, I would like to see the USED adjust rates to bring them in line wth the private sector.


There wouldn't be a point to having federal student loans if they did that. Why would anyone want taxes collected to replicate services that are available privately?

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 10:15 pm

sinfiery wrote:Lowering interest rates will be funded either by removing money allocated to programs like PAYE or raising taxes.


Profits from student loans are generally used as an incentive to fund repayment programs for those who cannot afford to repay their own dischargable student loans or those who want to pursue a higher public interest in lieu of large stacks of cash and can only do so with government aid.


I'd prefer they raise taxes, I guess.

I'm not very familiar with the loan repayment programs, so I can't comment on them.

As someone interested in PI and government work, I know I'm choosing to go to a school that won't leave me with an excessive amount of debt, so I will be able to pay it off when I graduate.

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MyNameIsFlynn!
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Re: White House Petition to Lower Student Loan Interest Rates

Postby MyNameIsFlynn! » Thu Apr 11, 2013 10:18 pm

drinion wrote:
MyNameIsFlynn! wrote:
drinion wrote:
MyNameIsFlynn! wrote:This sounds like a great idea! It's not like below-market interest rates are partially responsible for the rapid increase in tuition in the past few years. So if we cut borrowing rates even further, putting more money in students pockets, there's no way schools will take advantage of lower borrowing rates to increase their tuition even further!!


So you would prefer them to increase the rates?


Ideally I would prefer the government get out of the education loan industry entirely. That's not politically feasible, so yes, I would like to see the USED adjust rates to bring them in line wth the private sector.


There wouldn't be a point to having federal student loans if they did that. Why would anyone want taxes collected to replicate services that are available privately?


The government doesn't just replicate the private sector. There's a significant chunk of people who can't finance their education privately for lack of co-signer, credit, etc. Many types of USE.D. loans - at least in the amounts that would be needed to finance an education at a public school, community college, or junior college - only require the borrower to be a citizen and have a pulse.

And it's even worse for grad school. What private lender in their right mind would lend someone six figures to attend Cooley or (insert shit school here)? That's right - nobody would. So the government steps in to fulfill a perceived need and in doing so fucks over students by enabling them to graduate from shit schools with useless degrees. And thousands or hundreds of thousands in debt that will take years or decades to pay off, if they're even able to pay it off in full

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 10:20 pm

MyNameIsFlynn! wrote:The government doesn't just replicate the private sector. There's a significant chunk of people who can't finance their education privately for lack of co-signer, credit, etc. Many types of USE.D. loans - at least in the amounts that would be needed to finance an education at a public school, community college, or junior college - only require the borrower to be a citizen and have a pulse.

And it's even worse for grad school. What private lender in their right mind would lend someone six figures to attend Cooley or (insert shit school here)? That's right - nobody would. So the government steps in to fulfill a perceived need and in doing so fucks over students by enabling them to graduate from shit schools with useless degrees. And thousands or hundreds of thousands in debt that will take years or decades to pay off, if they're even able to pay it off in full


The ABA should have better accreditation standards.

eric922
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Re: White House Petition to Lower Student Loan Interest Rates

Postby eric922 » Thu Apr 11, 2013 10:20 pm

I also think they should be able to be discharged in bankruptcy, but I'll take what I can get.

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MyNameIsFlynn!
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Re: White House Petition to Lower Student Loan Interest Rates

Postby MyNameIsFlynn! » Thu Apr 11, 2013 10:29 pm

drinion wrote:
MyNameIsFlynn! wrote:The government doesn't just replicate the private sector. There's a significant chunk of people who can't finance their education privately for lack of co-signer, credit, etc. Many types of USE.D. loans - at least in the amounts that would be needed to finance an education at a public school, community college, or junior college - only require the borrower to be a citizen and have a pulse.

And it's even worse for grad school. What private lender in their right mind would lend someone six figures to attend Cooley or (insert shit school here)? That's right - nobody would. So the government steps in to fulfill a perceived need and in doing so fucks over students by enabling them to graduate from shit schools with useless degrees. And thousands or hundreds of thousands in debt that will take years or decades to pay off, if they're even able to pay it off in full


The ABA should have better accreditation standards.


This is true but misses the point. Below-market interest rates distort the actual cost of education at all levels, not just professional.

As for discharging in bankruptcy, that gives the government an even larger role in the education loan industry. If they're discharge able, then what incentive do students have to pay them back? Kids could just rack up 200k undergrad debt (and another 100-300 in grad or professional if they want) and declare bankruptcy upon graduation. Voila, you've got you're degree(s) and no debt. Before you say "but who would fuck up their credit like this?" think about all the dipshits you know. There's plenty of people who would take this route. And this possibility would scare the shit out of private lenders, meaning more govt loans.

eric922
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Re: White House Petition to Lower Student Loan Interest Rates

Postby eric922 » Thu Apr 11, 2013 10:38 pm

MyNameIsFlynn! wrote:
drinion wrote:
MyNameIsFlynn! wrote:The government doesn't just replicate the private sector. There's a significant chunk of people who can't finance their education privately for lack of co-signer, credit, etc. Many types of USE.D. loans - at least in the amounts that would be needed to finance an education at a public school, community college, or junior college - only require the borrower to be a citizen and have a pulse.

And it's even worse for grad school. What private lender in their right mind would lend someone six figures to attend Cooley or (insert shit school here)? That's right - nobody would. So the government steps in to fulfill a perceived need and in doing so fucks over students by enabling them to graduate from shit schools with useless degrees. And thousands or hundreds of thousands in debt that will take years or decades to pay off, if they're even able to pay it off in full


The ABA should have better accreditation standards.


This is true but misses the point. Below-market interest rates distort the actual cost of education at all levels, not just professional.

As for discharging in bankruptcy, that gives the government an even larger role in the education loan industry. If they're discharge able, then what incentive do students have to pay them back? Kids could just rack up 200k undergrad debt (and another 100-300 in grad or professional if they want) and declare bankruptcy upon graduation. Voila, you've got you're degree(s) and no debt. Before you say "but who would fuck up their credit like this?" think about all the dipshits you know. There's plenty of people who would take this route. And this possibility would scare the shit out of private lenders, meaning more govt loans.

The vast majority wouldn't do that. Bankruptcy isn't something people take lightly. You know what the rate of bankruptcy was when it was possible? Around 1%. 1% is a risk I'm willing to take if it helps out those who legitimately need it.

PRgradBYU
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Re: White House Petition to Lower Student Loan Interest Rates

Postby PRgradBYU » Thu Apr 11, 2013 10:38 pm

I have to create a whitehouse.gov account to sign the petition? Meh...

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 10:42 pm

MyNameIsFlynn! wrote:
drinion wrote:
MyNameIsFlynn! wrote:The government doesn't just replicate the private sector. There's a significant chunk of people who can't finance their education privately for lack of co-signer, credit, etc. Many types of USE.D. loans - at least in the amounts that would be needed to finance an education at a public school, community college, or junior college - only require the borrower to be a citizen and have a pulse.

And it's even worse for grad school. What private lender in their right mind would lend someone six figures to attend Cooley or (insert shit school here)? That's right - nobody would. So the government steps in to fulfill a perceived need and in doing so fucks over students by enabling them to graduate from shit schools with useless degrees. And thousands or hundreds of thousands in debt that will take years or decades to pay off, if they're even able to pay it off in full


The ABA should have better accreditation standards.


This is true but misses the point. Below-market interest rates distort the actual cost of education at all levels, not just professional.

As for discharging in bankruptcy, that gives the government an even larger role in the education loan industry. If they're discharge able, then what incentive do students have to pay them back? Kids could just rack up 200k undergrad debt (and another 100-300 in grad or professional if they want) and declare bankruptcy upon graduation. Voila, you've got you're degree(s) and no debt. Before you say "but who would fuck up their credit like this?" think about all the dipshits you know. There's plenty of people who would take this route. And this possibility would scare the shit out of private lenders, meaning more govt loans.


The federal loans only distort the "market price" of education. The government makes the loans because that "market price" would not allow most people to affordably educate themselves. Granted, this increase in demand for seats increases the price of the seats, but the loans weren't meant to lower the price. The petition is for the government to use the loans for their intended purpose, not to use them to fund other parts of its education budget.

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 10:42 pm

PRgradBYU wrote:I have to create a whitehouse.gov account to sign the petition? Meh...


Oh, come on! Imagine how many you'll be able to sign after this one! So much fun!

PRgradBYU
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Re: White House Petition to Lower Student Loan Interest Rates

Postby PRgradBYU » Thu Apr 11, 2013 10:48 pm

drinion wrote:
PRgradBYU wrote:I have to create a whitehouse.gov account to sign the petition? Meh...


Oh, come on! Imagine how many you'll be able to sign after this one! So much fun!


You talked me into it. Only 99,994 signatures to go!

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drinion
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Re: White House Petition to Lower Student Loan Interest Rates

Postby drinion » Thu Apr 11, 2013 10:52 pm

PRgradBYU wrote:
drinion wrote:
PRgradBYU wrote:I have to create a whitehouse.gov account to sign the petition? Meh...


Oh, come on! Imagine how many you'll be able to sign after this one! So much fun!


You talked me into it. Only 99,994 signatures to go!


YES!

I emailed the author of the article and "tipped" ATL about the original article and the petition. I was surprised they didn't post about the article earlier this week. Hopefully they will, and maybe they'll link to the petition.




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