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Friday, October 28, 2011

Student Loans


President Obama recently unveiled a program to help out students pay back their student loans with lower interest rate and forgiveness after 20 years. During the 2008 campaign, then candidate Obama saw education for all, as the key to future prosperity and competitiveness. The president proposed paying off student's loans if they agreed to teach school in the inner cities. It was part of a one hand washes another, but some saw it as another welfare program. The attitude being "if I had to work three jobs, and it took me six years to graduate, then by god, that’s the way should be for everyone." I understand the financial responsibility and sacrifice part, but all things are not always equal. Today, we have 9.1 unemployment and last year's graduate is competing with the 2008 graduate. Last year the administration saw the riots in Europe over tuition increases, and they also saw all the potential student-loan defaults to be a trillion dollars and rising, so they thought it was prudent to try to get a handle on the situation before it got out a hand.

Some have suggested that those that do not have the funds to go to college should just wait until that time becomes available. I don't think too many of us could have used that same logic when we applied for our first mortgage. Yes, we had a good job, excellent credit, and the funds available to make the mortgage payments, but our job wasn't guaranteed. There's a risk in just about everything we do but we all strive for a manageable risk. I'm not saying that every student should get in debt that they won't be able to afford, but they are exceptions. I believe a brilliant student can make a wise choice by getting $45,000 in student loans for their medical school, especially since it will produce $165,000 a year for the graduating student. The thing I'm hearing is “if you can't afford to pay cash, then forget about earning higher wages and being more productive because it's not the cards." If President Obama and Supreme Court justice Sonia Sotomayor had not sought out student loans,they wouldn’t have the jobs they have today.

We already have 11 separate tax incentives for higher education in our tax code but only those in the upper-middle class and above can take advantage of them. I worked for a company that took pride in its educated work force by paying the tuition cost for all those that wanted to attend college on their own time. The company lost a few employees because one became a CPA and another completed his masters in nursing, but they were productive and happy employees while we're had them. I guess that's the difference between liberal and conservative thinking. The conservative just looks at the bottom line.

I guess people look at the words “20 year forgiveness" part and think it's just another giveaway to the minority and poor by the government, but the numbers don't bear that out. The 1.6 million who might benefit by this might be that former business person who was recently laid off.

Business loans are restructured everyday but conservatives want all failing businesses to go into bankruptcy rather than being propped with taxpayer funds. Bankruptcy it just another form of debt forgiveness where the debt holder settles for a very low percentage of the debt. In this current program, the taxpayer will not be on the hook for the student loans because it will be paid for with the savings from past practices of subsidizing those loans, but some don't like to see the working poor get any kind of break.

Edith Ann accomplished more than I ever could at the VA thread, by emphasizing the cost of college back then and what it costs today. Of course that brought in a right winger blaming the administration for the rising cost of education. I have yet to see an answer for the cost of the deregulation. There will be those that will side with the predator lenders after university turned their loans over to them for a substantial fee.I give credit to born2Bme for being her own person and thinking outside the box. I also give her credit for her analysis of  why college cost are rising. She said "Get rid of all of the "help" that students get to go to college and not as many kids go to college. The colleges will have to do something to attract students, and that will have to be lower costs." That might bring down the costs of college but in the meantime those that can afford it will get the upper hand and the "rich get richer" cycle remains and our country will suffer for it as our competition passes us by.  We will then need to extend more visas to special skills students in order to remain competitive in our global economy. The thread will continue with the normal pats on the backs for those who paid their student loans ages ago and the “holier than thou” preaching will grow because chest thumping beats looking at the new program with an open mind.You won’t see “ perhaps we can change the parameters to make this program more feasible or something of that nature.”

In the words of Herman Cainif you're not rich and are unemployed; doesn’t blame Wall Street blame yourself…. Oh I could use that $12,000, I lost after the Wall Street crash of 2008, and I probably would send it to the protesters on Wall Street because they are the only ones dealing with reality. The 1% saw their income rise 275% from 1980-2010 while the middle class saw theirs rise by~ 18% during that same period.


Edith Ann said...

I am worn out from the Advocate, but I categorically disagree with born on taking away the help and college will lower tuition. In theory, yes, but in reality, just how many quintillion (that is 18 zeroes) years do you think it would take for that to happen. And in the meantime, students are supposed to do what?

Yeah, it's Obama's fault. It been this way forever, but it's Obama's fault.

And why am I the only one talking aout Geanie Morrison? Talk about a free pass!

Edith Ann said...

Not every college student is fresh out of high school, unemcumbered with family and obligations.

Sometimes we're single parents who have decided that we can either work the floor at J. C. Penney's and try to raise two children, or we can get an education that can help us raise our children and not rely on welfare.

When I was a 31 year old student at Victoria College and I had the ever priggish Geraldine Talley as a sociology teacher, she made a comment that really annoyed me.

She said, "Any woman who divorces her husband, destines herself to a life of poverty." I said, "No matter why she left?" She said, "No matter." (that was probably the second time in my life that it became very clear to me that republicans have very screwy thinking)

And I looked around the classroom at the women in the nursing program and the women who were studying to be teachers and knowing that many were divorced, and wondered why we were all there.

I only know I was there because I did not want a life of poverty.

Mike said...

I never get worn out but I know when I'm wasting my time.

You make a good point about the time lapse that wasn't considered...On the basic principles of supply and demand, born is right but those assumptions don't consider the consequences such as teacher pay and other essential costs needed to run the institution.

That's the same question I had, what do the students do in the meantime?

I don't even read rollingstone's posts any more because they don't make any sense.They are boilerplate right wing talking points. At one time, they criticized Obama because the stimulus was used to support union paid public employees and now the lack of Federal money bankrupted the states. Which is it? Texas used $17 billion in stimulus to balance our budget. Texas legislators also deferred $5 billion in Medicaid payments and cut four billion in education. We're still dead last in health care for our children and almost last in education but that was before Obama became president. That's just more right wing talking points like all of a sudden some regulations and the EPA is pushing us over the cliff.

If you don't start arguing ,those skills will deteriorate..:-) They will never address Geanie Morrison or any other good point you might make. Like the national politicians, they will just skip over it ,as if it never existed.... That's why Steve jobs told Rupert Murdoch that his Fox News is a destructive force...They do the same thing.

Mike said...

Wow,Geraldine Talley sounds like Michelle Bachmann.

You certainly proved her wrong a thousand times over.

Mike said...

I like Gheni's response because it seems like she did all the right things, so I hope her efforts are not overlooked by those unwilling to have a dialogue. They would rather make a statement.

Edith Ann said...

I am always puzzled by folks who like to look at problesm as if they are trains. The can only see the caboose as the problem, and cannot fathom that the problem is up at the front of the train, the engine that is driving the problem! Geanie Morrison is driving the train and the rest of the legislature that voted to deregulate tuition are riding in the other car.

It would take generations for colleges to be finally put in a position where they were forced to slash tuition to attract students.

But, I've done all I can do. I'll leave it to the others.

Mike said...

I know exactly how you feel....Some are worried about the taxpayers except when it comes to the insurance companies,oil subsities,tax cuts for the rich,Wall Street,and defense contractors....Taxpayers won't be billed for Obama's student loan program.

Edith Ann said...

HookEm1 gets it. He/she left a message on my Advocate wall. Made a good point. The college doesn't have to produce, the student does.

Mike said...

I agree it's a great comment....some have said the universities lose but that's not always so ,because before the government took over ,they were selling the student loans to 3rd party loan companies...Guess what they did? Jacked up the interest rates.

People are making their case on Victoria and Texas but it's a 50 state problem where their home spun lectures don't apply.They don't realize the problem because all they are interested is lecturing others without facts.

What they don't realize,a lot of those students will repay those loans and pay MORE income tax after they graduate.

Mike said...

Have you noticed that the thread about Holloween costumes didn't stir up any resentment,in fact Rebecca had a little fun with it but WWW is asking why people are thin skinned,and Observer gripes about political correctness?

We are going to have a long twelve months...:-)

Edith Ann said...

They do not know how to think in the big picture. That is what they get when they are trained by FOX to digest tiny bytes. And for Pete's sake, do not expect them to string thoughts together to come up with a complete concept.

I'm going to Costco next weekend. Shall I pick up one or two jumbo boxes of microwave popcorn? It'll be my treat...

Rebecca said...

I was going to ask GETSMART if it would insult him if I were to dress up as Telly Savalas this Halloween... I figured I better stop posting obsessively.

Mike said...

You should do more posting ,not less because you have a great way of defusing a subject before it picks up any steam......I'm too old for Halloween,,so I would have ignored this thread ,if not for your posts.

BIGJ said...


It is about time you are jumping on the anti-Geanie Morrison wagon. Speaking about craziness, I would hope you talk some scence to person who cried on your blog about having a relovution because of his own personal/Social Security problems. You know who I am talking about.

Mike said...


I was never pro Morrison; I'm just not obsessed with her being the root of all evil in Texas. Everything is about context. When Edith Ann asked "And why am I the only one talking about Geanie Morrison? Talk about a free pass!"....I replied "they will never address Geanie Morrison or any other good point you might make. Like the national politicians, they will just skip over it, as if it never existed."

Again, I see this as a national program not one for Victoria and Wharton. We might not even have a problem with student loans in this county.

If you're talking about Pilot and his talk about a revolution; I've been saying the same thing for years but I don't know how the revolution would take place. It might be a wheel chair and fold away walkers protest at the Washington Mall, a mass e-mail campaign, jamming the White House switchboards, but we would have the highest voter turnout in the history of this nation. Republican politicians know that, even Ron Paul will assure the current retirees and those about to go on Social Security that their situation will not change. That's why I continue to say that Social Security will be there when a young person like you retires.