The fact that this will be a battle royal is a perfect symbol of everything that's wrong with our unresponsive, corporate-owned government.

The best thing Obama could do for this country is leave the Democrats and spend his next four years attempting to destroy both political parties.

Now is the perfect time to phrase the issue as: "Who are you supporting? Insurance companies or middle class students?"

Thanks, AIG.

I think that the way to win a fight like this is to embarrass Congress.

Congresscritters are fond of saying that Lobby X is extremely powerful. But lobbies really only have indirect power: only elected officials get to write legislation and cast votes. Any representative or senator serving the interests of the parasites should be named and shamed.

And Obama should threaten to veto any version that doesn't cut the banks off from their unjustified student loan subsidy.

Simple solution: Take the power to decide away from the colleges and give it to the students and their families, explaining how they can save money by cutting out the middleman. It's called, "starve the bloodsuckers via free enterprise."

Anyone remember the pre-Sallie Mae NDSL (National Direct Student Loan) program from the 70s and early 80s -- killed off by Reagan?

Loans directly to the educational institutions, who applied on behalf of the students as part of the financial aid packages.

The loans worked too well, of course -- low admin costs and high repayment rates, with nothing for the campaign-contributing middlemen -- so it was killed off. Too bad -- it helped me get through college.

Oddly enough, while Reaganuts were railing against student loan "abuses", the program they were talking about was the GSL -- General Student Loans (or maybe Government Student Loans). These had higher interest rates (7% in a time when mortgages were 16% and higher), and were subsizidized and guaranteed by Uncle Sam. Banks loved them because they were essentially free money to the bank. Any student was entitled to one loan of up to $2500 annually, so the parents who didn't need them still took them out and invested the money at higher interest rates. Ironically, it was the wealthier kids who had the highest default rates, since not paying off your student loan wasn't a big hit on your credit rating back then, for reasons I don't know.

What we need now is a national program of NDSLs. Of course, they'll need to invest in fraud investigations. Otherwise you can bet that Halliburton University and other fraudulent firms would suddenly be established to relieve the government of its money.

Steve Benen wrote: "Here's hoping Obama is able to finish the job Clinton started."

You know, it's funny how much of Obama's task amounts to "finishing jobs" that Clinton abandoned in the face of resistance from the corporate-owned reactionary right wing.

The Department of Education Student Loan people refuse to even talk about restructuring my loans and lowering my interest rates, set at 8.25% which is far and above the interest rate for 30 year bonds.

The various private student loan agencies I have talked with lie like Republicans about everythng from potential interest rates to payment amounts.

The whole industry and program should be gutted, then reinvented by people NOT in the industry to be fair and honest.

In a nutshell, this is a no-brainer...

Then you can expect that those with no brains will be against it.

In fact, I think everyone should write their Congressional representatives (I would not bother with Republicans, they don't care) showing support for the program. If the corporate giants of the student loan industry are against it, it HAS to be good.

Let's see what Dhimmicrat-in-Chief and legend in his own mind Senator Ben Nelson does here. He was holding up the budget reconciliation over this issue, since one of Nebraska's biggest businesses (and a major source of "gimme" for this worthless PoS masquerading as a Senator) is the screw-the-students loan industry.

C'mon, Benny-boy, let's see your "dhimmicratic principles" at work here.

Ironically, it was the wealthier kids who had the highest default rates, since not paying off your student loan wasn't a big hit on your credit rating back then, for reasons I don't know.

Since the government guaranteed the loans, the default had little or no cost to the lender. The purpose of private credit ratings is to identify (and deter!) actions which harm lenders. Therefore, a default on a government guaranteed loan is less bad than a default on most other loans, from the point of view which credit ratings are designed to serve.

Lets not forget Nelnet, who stole almost 300 million fron the taxpayers by falsely classifying loans, only to have the bush administration let them keep if they "promised not to steal any more"

Watch Obama fold. I give this gesture three days before it's dead and buried. He bent over for Citi and Goldman and MS. He'll bend over for the rest.

The eventual compromise led to two types of student loans -- direct loans and guaranteed loans. Colleges were allowed to choose the system they preferred.

Does anybody know if this compromise is still in effect? If so, it might provide a work-around of sorts if the administration can't get this change enacted. In theory, provided there were some means of educating families about which schools use which method, it might be possible to force schools that eschew the direct loan method to "lose business" as parents and their children opt to apply only to those institutions where they know they won't end up getting shafted in the student loan process.

Watch Obama fold. I give this gesture three days before it's dead and buried. He bent over for Citi and Goldman and MS. He'll bend over for the rest.
Posted by: empty suit

He won't fold on the millions of college grads who still owe on their loans, and the millions of students who'll need those loans---and whose votes he'll need in about three-and-a-half years.

But that's okay---you wouldn't have thought about that, seeing as how your Beckish skull matches your suit.

Twit....

How to improve the situation for students seeking loans is great, but: I want to know what the heck happened to college costs in the first place. Well the hell does the money go, compared to years ago? This is the key.

My daughter has a BFA and then pursued a second degree. She could not get government loans for the second degree so the best deal she could get from a bank is 8.5% interest. I had to co-sign for her to get that rate and she owes $45,000. This is nothing short of larcenous and totally stifles the potential benefits to the country of a better educated public. Only the bankers, who risk nothing, are making out on these loans. Un-American as hell as far as I am concerned. But whoever said the bankers were interested in being good citizens. About as patriotic as defense contractors.

Steve, here's the real shit-house:

I'm in my sophomore year of college and have been on a 2-year scholarship that paid for everything except lab fees and books. Great, I know. However, the next 3 years I will be in college I will have to take out student loans. I just read an article in my college's newspaper about these student loans of which everyone praises because you "don't have to pay them back until you graduate". Well...guess again.

Sallie Mae is just one company starting something new. In addition to many students paying, by themselves, for rent, food, books, etc., now they will have to start paying back the student loans so heavily relied upon BEFORE THEY GRADUATE!!!! Sallie Mae is also trying to make it harder for students to get loans.

Please look for more information on this.

For Sallie Mae to save jobs, the student loan giant first has to shift their much of their operations from overseas back to this country so those jobs can be saved. Can you say cynical?

Of course, it isn't about saving those newly repatriated jobs. It's about saving Albert Lord's job.

As soon as you/we (I still have mixed loyalties sometimes, depending on who's pissing me off) have dealt with the issue of getting the health *care* (as opposed to the health insurance) straightened out, the issue of education should come next. Y'all do realise that most of the civilised world provides free college education to those who can pass the entrance exams, right? Even so, it may still be a hardship for some, what with having to find lodging (sometimes; sometimes, it, too is provided) and money for textbooks and food and not being able to help support your family while you're at college... But, basically, "if you're bright, it's your right" rules in the dreaded Europe.

BTW... Since when has 5yrs become a completion standard for a "4yr college" (as per Katie's posting @21:59)?

This is just another example that it's conservatives who are the real Socialists -- defending the private sectors dependence for profits on government handouts.

Exlibra, depending on the program, I know of many people who spent 5 years as an undergrad. It was pretty common in my engineering school, where the course load was fairly concentrated (I couldn't take advantage of the 5 year plan, as my scholarships ran out after 8 semesters). It's also common for double majors, students who have transferred; not all courses transfer from school to school.

Katie, if it's still an option, file the deferment paper work. The financial aid people at your school should be able to help you out. You should still be able to defer payment on your loans while you have full time status. When I had unsubsidized loans as an undergrad (9 years ago, at this point) payment came due while I was still in school. Since I was still enrolled full time, I was able to defer my payments until after graduation. I still had to pay the interest. Under the deferment agreement, the interest got tied into the principle every year. I ended up with a larger loan, but I was able to keep paying for school.

FYI: The interest rate on PLUS loans is 8.5%. They are the loans parents typically rely on these days to educate their college-age children. The PLUS program was established to make money for lending institutions, not to help students.

It is typical, too, for banks to contract collection agencies for their repayment process. We've just encountered an exasperating situation with on of these outfits: bad record keeping (we wind up sending them photocopies of canceled checks); customer service reps who speak little English and have no access to current information; multiple and conflicting repayment addresses; arbitrarily imposed late fees; etc.

Right now, I'm working on determining where the company headquarters is located with the help of a colleague's grad assistant in our school of business. When I discover the state location, I'll be writing a concise letter to its department of consumer affairs.

The problem I had with the Plus loans, is that my school kept insisting on putting them in my financial aid package. My parents would never qualify for the loan, having bad credit. It was obnoxious. I kept asking for loans for myself, that I would qualify for, yet every semester there would be the Plus loan. Even after my parents would be turned down, I couldn't get another loan put into my financial aid package, since, according to the school, I was at my max for aid for the year (the plus loan being included). It was basically another $2000 a year I had to make up a year out of pocket.

We believe a local, non-profit agency helping local students is better than a one-size-fits-all Washington program run by a low-bid government contractor. Please visit www.keepstudentloanslocal.org.