Letters to the Editor

Letter: Student debt

June 14, 2014

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To the editor:

On Wednesday, Sens. Pat Roberts and Jerry Moran voted to block legislation aimed at letting people refinance their student loans at lower rates. The student loan bill would have let millions of borrowers, some with years-old debt and interest rates topping 7 percent or more, refinance at today’s lower rates.

The proponents made the choice clear: millionaires and billionaires or students? People who have already made it big or people who are still trying to get a fair shot?

A broad grassroots effort with more than 750,000 signatures on petitions was gathered. That’s how the bill got well over 50 votes. 

The case was made. When the government reduces its profits on student loans, reducing tax loopholes benefitting millionaires and billionaires would make up the money. It called on the wealthiest among us to pay at least as much in taxes as middle-class families.  

Most Republicans said it was more important to protect the tax loopholes for millionaires and billionaires than to cut the rates on student loans.  But this issue will not go away! 

A special thanks to the three Republican senators who voted to support students: Susan Collins of Maine, Bob Corker of Tennessee and Lisa Murkowski of Alaska. Unfortunately, our Kansas senators, Jerry Moran and Pat Roberts, chose protecting the millionaires and billionaires over students!

Our students, past and present, deserve better than this!

Comments

Richard Heckler 1 year, 1 month ago

Exactly.

Between the big banks and the ALEC GOP politicians don't expect too much in the way of practical thinking. Here is one more example of their inability to display rational decision making. The two are simply sheep.

It appears Robertson and Moran chose deliberately crashing the economy IF it enhanced the ALEC GOP positions to take back the White House and Congress? Reckless indeed. http://www.theguardian.com/commentisfree/2012/jun/09/did-republicans-deliberately-crash-us-economy

Another issue that demonstrates irresponsibility is the failure of Moran and Robertson to demand a grand jury investigation into the financial institutions that have been financing college loans for America's graduates. The activity surrounding this issue will make the Bush/Cheney fraudulent home loan debacle seem like child's play. What's up with this?

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

What is it about taking control of the big bank loan programs that brings about such questionable behavior in Sen Robertson and Sen Moran?

Scott Burkhart 1 year, 1 month ago

Those mean old millionaires and billionaires! Maybe we should march them all out onto the tundra, line them up, and execute them by firing squad. Or what about reeducation camps? This worked for the Bolsheviks, didn't it?

Brock Masters 1 year, 1 month ago

I realize you are being sarcastic, but the scary truth is if you went out among the populace and asked, "should millionaires be required to give up half of their worth to regular people or face jail" many would answer yes.

Brock Masters 1 year, 1 month ago

The English language is wonderful. It is so robust and those that have command of it can make it dance and spin.

Yes, they can spin it to make something appear far more sinister or Nobel than it really is.

Yes, call a tax deduction a loophole and it sounds dishonest. Those millionaires are manipulating the system by finding a loophole to avoid paying taxes. No, they are using a legitimate deduction just like the rest of us.

It isn't closing a loophole it is eliminating a deduction which is raising taxes.

Let's call it what it is

People like Forest, Donna and Richard want to raise someone else's taxes to allow someone else to break a contract that they knowingly and willingly entered. Is it a bad deal that they can refinance? Perhaps, but it is the deal they struck. Don't penalize someone else because they made a deal they now don't like.

Ron Holzwarth 1 year, 1 month ago

Mortgages on homes are very often refinanced to take advantage of a lower interest rate. I fail to see any difference.

Sam Crow 1 year, 1 month ago

The difference is that when you lower your mortgage rate from 5% to 3% other taxpayers dont have to pay the difference. Additionally, when you refinance that mortgage you must requalify for the new loan. The student loan proposal simply lowered interest rates with the wave of a pen.

Brock Masters 1 year, 1 month ago

Sam, you are absolutely right. I would only add that the original mortgage allowed for refinancing so no need for the government to alter the terms of the contract after the fact.

Ron Holzwarth 1 year, 1 month ago

All you have to do to refinance any loan is pay off the original one with the proceeds from another one, with either a lower interest rate, or a longer term. That is the way it is with any loan, there are no exceptions.

It's even possible to take out a mortgage on a house to pay off a student loan. The problem is that many or most students have no collateral to use to secure a new loan at a lower interest rate or a longer term.

Source: 'California Real Estate Principles', a college course I took in southern California years ago, and the tidbits I received from my brother-in-law, who worked in real estate for many years.

Brock Masters 1 year, 1 month ago

Ron, not exactly the same as refinancing. When you refinance a loan you do it with the original loan holder. Yes, a person who has a student loan could pay it off with another loan, but they lose some of the benefits that a student loan offers.

It isn't like the interest rate and inability to refinance was a secret when they took out the loan. Not the taxpayers problem they don't like the terms of the loan now or that hey can't secure another loan with better rates to pay it off.

Ron Holzwarth 1 year, 1 month ago

"When you refinance a loan you do it with the original loan holder."

I doubt that very much. I can't imagine where you heard that, or who told you that. USBank is constantly advertising that they will refinance your car loan from another bank for you at a lower interest rate. And, for instance, I could take a cash advance on a credit card and pay off a car loan. Other loans are no different.

Under federal law, only earned interest can be collected, and although there might be a prepayment penalty, any loan can be paid off at any time. Exactly where you got the money to pay off your mortgage or loan is not the business of the lending institution.

Ron Holzwarth 1 year, 1 month ago

But you do have a point about losing some of the benefits that a student loan offers. I can think of three that are significant. One is that there are no payments due as long as the former student works in some types of service, the loan is entirely forgiven in cases of total disability, and if the former student dies before the loan is paid off, it is not collected from the estate.

None of those things are true in a private sector loan.

The real problem is that the optimism of youth overrides critical thinking.

For example, I once overheard a couple students talking a couple years ago. Spring break was fast approaching, and one of them was going to Padre Island. The other asked him, "Where did you get the money to do that?"

The answer was: "Just take out a student loan! The payments will only be about a hundred dollars a month after you graduate."

I thought, oh boy. You're in college, and you don't understand math yet?

Ron Holzwarth 1 year, 1 month ago

Federal Stafford student loan interest rates vary from 3.86% to 8.25%, depending upon when the loan was originated, and the level of degree that the student is or was working on. The interest rate becomes much higher, in addition to the loan amount increasing by 30%, if the loan falls into default, whether or not the former student had any control over the situation. Such as health reasons, or the inability to find a job due to our present economic climate.
From:
http://www.staffordloan.com/stafford-loan-info/interest-rates.php

And, the government's Treasury Bills, that is, the money borrowed by the government for operation, varies from 0.04% (4 week) to 0.09% (1 year). Although, Treasury constant maturities are sold at an interest rate that is higher, ranging from 0.04% (1 month) to 3.39% (30 year).

So, if the loans are repaid in less than 30 years, the government will earn a great deal of money by loaning to students, and it will cost the taxpayers nothing.

Of course, this is all predicated upon our financial system remaining relatively stable over a period of decades, which is a very questionable premise.

Source for the above statistics:
http://www.federalreserve.gov/releases/h15/current/

Richard Heckler 1 year, 1 month ago

Unfortunately the school loan program got infiltrated by the big bankers who wanted to make more money on money they are getting for 0% interest….. which incidentally is our money.

Yes OUR MONEY that the for profit fed somehow became the management team. Not doing a great job.

I cannot support the banking system being anyway involved in taxpayer backed student loans. Time and agin they are proving themselves incapable of running an ethical operation.

What happens to banks or any other corporation that become to big to fail? There is no more risk because taxpayers become the liability insurance and corporate upper level white collars become the proud owners of very large bonus packages and golden parachutes AT OUR EXPENSE.

What happens to banks or any other corporation that become to big to fail? There is no more risk because taxpayers become the liability insurance. Why? Who in their right mind would insure a corporation "too big to fail"? Any business to big to fail would take out an insurer or two if "too big to fail" failed.

Too Big To Fail and Getting Bigger (This is a quite recent documentary) http://billmoyers.com/?gclid=CNXXh9iA_b4CFabm7AodWgIAXA

SOOOO why are we the taxpayers the insurance policy for banks, coal fired plants and Nuke Power Plants? Holy crap they are rolling in the dough.

Bob Smith 1 year, 1 month ago

CAPS LOCKS ARE STICKING! Also, the comma can be your friend.

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