Obama Cites Student Loan Savings

President Barack Obama told Americans on Saturday his student loan overhaul should help drive college graduation rates back to the top worldwide and save money in the process.

Capping a week that saw Congress pass student loan changes in something of a shadow from the landmark health care law, the president cited expected benefits for young people: more student lending, caps on those repayments and more money for minority colleges and universities.

Mr. Obama is expected to sign the education bill into law Tuesday.

"This reform of the federal student loan programs will save taxpayers $68 billion over the next decade," President Obama said in his weekly Internet and radio address that the White House released early Saturday. "And with this legislation, we're putting that money to use achieving a goal I set for America: By the end of this decade, we will once again have the highest proportion of college graduates in the world."

Democrats in the House succeeded in linking the education bill with the health care overhaul over stiff Republican objections, giving President Obama a series of accomplishments - including an agreement with Russia on nuclear weapons- after a rough and divisive several months.

"To make sure our students don't go broke just because they chose to go to college, we're making it easier for graduates to afford their student loan payments," President Obama said.

"The average student ends up with more than $23,000 in debt. So when this change takes effect in 2014, we'll cap a graduate's annual student loan repayments at 10 percent of his or her income."

Under the measure, private banks would no longer get fees for acting as middlemen in federal student loans. The government would use the savings to boost Pell Grants and make it easier for some workers to repay their student loans. In addition, some borrowers could see lower interest rates and higher approval rates on student loans. Savings are also meant to go toward reducing the deficit and helping to pay for expanded health care.

President Obama is of course hoping the health and education initiatives will pay dividends for Democrats in the November congressional elections and improve his own prospects in a presumed 2012 re-election bid. One wrinkle, though, is that most pieces of this week's legislation don't kick in until 2014 - well after the midterm elections and the next presidential election.

Mr. Obama said the achievements show "what's possible when we can come together to overcome the politics of the moment, push back on the special interests and look beyond the next election to do what's right for the next generation."
By Associated Press Writer Philip Elliott

[checkinFacts]

This is simply theft from the companies that were offering these loans.
The demoncrats will be stopped.

[checkinFacts]

Obama brags about stealing 68 billion from banks and financial institutions

Today President Obama proudly exclaimed ?We TOOk 68 billion dollars from the banks and financial institutions? (part of the school loan takeover)

[tsigili]

More lies. The reason the student loan bill was thrown into the health care bill, is that it was going to be hard to pass any other way. If you really think there are going to be any savings realized, you are totally naive.

[luadda22]

Variablespanner, typical liberal, when you run out of viable arguments you revert to name calling and hate. I am not a member of the tea party nor will I become a member.

Read my the post again, all of the Obama pundits are out there stating that this will save the government $68 billion ( as stated in the CBO report using FCRA accounting). Also in that same report the CBO states that using the "fair value basis" of accounting it would be a $52 billion deficit. All I was saying is you have two different numbers in the same report. One says it will save money, the other saying it will cost money. Obama believes the $68 billion number. I however, knowing of NO government program that "saves" money, tend to believe the second number that states that it will increase the deficit by $52 billion.

Would you read the report and state your findings. It's only 36 pages, which I guess could be a problem for someone with a short attention span (but it does have some pictures).

[krotec54]

SueZeeeQue ,darling,
You ask, "What does someone who makes it harder and more expensive to go to college do for America?"
To insure that this student will commit to an education that will advance them to a higher paying career to repay the loan. You don't want to give a college education to someone that will not go to classes and make an improvement .

[SueZeeeQue]

Of course the party of NO is against this.

Making it easier and less expensive to get a college education while reducing the deficit goes against everything Republicans stand for.

What do they stand for?

They stand for NO.

[luadda22]

SueZeeeQue, If you want to make it less expensive, lower the cost of tuition and books. Then pay for it without loans. You liberals hate planes; look up how many universities own their own aircraft. If the "evil" CEO's can't have them I don't think the "bastions of liberalism" should have them either.

I don't understand why people obtain government loans that can take up to 25-30 years to go away. Student loans of any sort (direct, guaranteed, or private) are rarely forgiven in Bankruptcy proceedings, and there is no statute of limitations on their collection. The Treasury Offset Program enables the Department of Education to collect from delinquent borrowers by having the Treasury withhold a portion of their federal transfer payments, such as tax refunds or Social Security benefits.

Don't believe I would want any part of that program, how about you??

[krotec54]

Has anyone notice that the middleman is an American with a family with a house payment and kids in college. Why put them in the unemployment line and hire unskilled oversea union workers?

[SueZeeeQue]

What does someone who makes it harder and more expensive to go to college do for America?

What does he produce except another huge obstacle to getting a college education?

Can he design a car like a college educated engineer can?

Can he discover a new kind of energy to fuel our economy like a college educated engineer can?

Can he discover new medicines to fight disease like a college educated chemist or doctor can?

Do these people produce anything?

[sjc_1]

"oversea union workers"

I did not know that workers coming from over seas were union people.

[luadda22]

sjc and nolieshere, What part of "FFEL lenders are compensated for administration and funding on terms set by statute under the Higher Education Act", don't you understand?? If the banks are making $10 billion in profits, it's the government that controls the amount the banks receive, if they are making too much money, it's the governments fault. BTW sjc_1, only the Treasury can print money.

In the event of default, FFEL lenders are only reimbursed at 97%, they do have risk.

Nolieshere, you make my point, it's the government that will be using "third party" servicers. So I guess the government will "enjoy huge profits".

Don't believe everything the Obama tells you. He picks and chooses what the wants you to know. Here is a direct quote from the CBO report "The CBO estimated that whereas loans issued in the direct loan program between 2010 and 2020 would reduce the deficit by a total of $68 billion under FCRA accounting, those loans would increase the deficit by $52 billion on a fair value basis". So which number do YOU believe, that it will reduce or will it increase the deficit?? Knowing the government, I know which one I believe.

Da*n, it's hard to have a battle of ideas, logic and truth's with un-armed people.

[luadda22]

variablespanner, What does any of this has to do with the "Tea Party"???
The CBO report states "that it would increase the defifit by $52 billion on the fair value basis". So if you think "THE DEFICIT IMPACT" is $120 billion (your numbers not mine), then adding $52 billion would raise it to $172 billion. The Federal Family Education Loan (FFEL) program was created under the authority of the Higher Education Act
of 1965. Johnson was president, a Democrat. So if you feel it's screwed-up, it was the democrates that did it and if they did it once I'll bet they can do it again. What do you thnk??

[sjc_1]

Certainly fronting for banks making $10 billion per year on loans with little or no risk is like a license to print money, low risk pure profit. The license to print money is a metaphor, you take too many things literally.

[jschmidt27]

http://www.cbo.gov/ftpdocs/110xx/doc11043/03-25-StudentLoans.pdf The interests rates would be lower if the banks competed for business. Instead the govt is going to take all the risk of the loans.

[jschmidt27]

http://www.cbo.gov/ftpdocs/110xx/doc11043/03-25-StudentLoans.pdf It appears the costs of student loans is a result of the interest rates defined in the law.

"Under current law,subsidies vary considerably from year to year because the
interest rates charged to borrowers are fixed by statute and unrelated to market interest rates.
The cost reduction results primarily from eliminating federal payments to FFEL lenders that exceed the administrative
costs associated with loans in the direct program."