Posts Tagged ‘student loans’

The student loan provisions in the president’s budget are too sweet for some many Georgians.  I tell you this deal is a game-changer for some many of people who invested in themselves on a positive tip rather than the millions we spend locking up fools who don’t know how to act right or people who ran up their credit cards eating at Applebees seven times a week.  

People can listen to that psychobabble from the Far Right but this relief for middle America is grand. Hey, it’s pork when it is the other guy but when it helps me it is invested.  “But we are spending our child and grandchildren’s money.”  Hey, I can’t afford children because I still have a growing student loan.  My child is Sallie Mae. 



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Recently, I was listening to a CNN report on short sales of homes.  Basically, the bank decides to take a payoff short of the current debt amount on a property.  The adjustment reflects the reality of the economy, job market, and housing crisis.  The federal government should consider a short sale program for student loans with the borrower buying the adjusted debt from himself and the fed eating the loss. 

For example, a student borrowed 20K but the interest has ballooned (forbearance and Income Contingent Repayment) 35K.  The fed eats 15K and the student get a short sale new loan of 20K with a low interest rate.  However, the student is not allow to get new debt (car, boat, house, kids) above the 20K amount until the student loan is repaid. Okay, this is not China so I can say kids.  

While the job market is down, people are staying in school to live off student loans but the mountain of debt is growing. Everyone I know has an advance degree that qualifies us to be unemployed.  Middle class is about an income amount; not your education level or the ability to discuss wine, jazz and global warming.  Hiatus…Sabbatical… Blank, please.  You are just plain old unemployed. You are writing a book.  You need to be concerned with your checkbook.    

Short sales

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Bailout for Student Loans

The problem with all these bailouts is where do you draw the line.  Banks and financial institutions were bailed out, as were people who bought way too much house.  Unemployment benefits are extended again and we have “Cash for” this and “Cash for” that.  What about student loan relief for Americans who spent money trying to improve themselves?  We spend near 30K to put someone in Georgia State Penitentiary but what about the kid who graduated from Georgia State University.

The people who are constantly moaning about socialism need to consider our college finance system.  I am not sure about today but when I was in college, a kid whose father punked out on the family often qualified for a free college education.  Okay, it was not free because my parents’ tax dollars funded it.  On the other hand, I had to pay for my education and like the Obamas, that debt continued late into life.  That’s socialism or the redistribution of wealth.   

I just joined a facebook group looking into a bailout for student loan but I have my own ideas.  The federal government should take that returned TARP money and create a student loan program similar to the housing recovery deal.  The formula could involve a long payment term with zero interest for the original loan amount plus 25% of the accrued interest.  People who received other bailouts would not be eligible nor would people drive new cars with rims.  Hey, we spent some much money on the space program, Afghanistan nation-building and Ray Ray’s babies mommas; what about the people who were doing something positive.  We should remember that the federal government failed to monitor and regulate Wall Street and the economic engines—leading the high unemployment and slow student loan repayment.       


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The student loan agency/firm/company/corporation Sallie Mae recently announced that they are bringing 2000 jobs back to the United States from the Philippines and India.  Public officials and policymakers need to take a hard look at quasi-governmental organizations that lead to the credit crisis but lobby Congress like private firms. 


The ultimate insult must have been some student loan borrower explaining that her payments are late because there is no work in her city but the person on the other end of the line is in Bangalore, India.  “Why haven’t I made a payment, are you kidding me.  Are you calling me from the other freaking side of the world to sweat me about a student loan that is partially a United State government loan—unbelievable?  I have not made a payment because you have my job.”


And why are we bailing out people who bought too much house but people with student loan debt will watch that load grow exponentially without relief.  The cute Wall Street products and devices that ruined our economy include the slippery slope of student loan deference and forbearance.  A bigger threat to American security than nutty terrorists is Raj with the headset taking American jobs and China holding our national debt.


“This is Raj..how may I help you.  No sir…begging your pardon…I did take your job nor food from your children’s mouths…..would you like to may a payment today.”

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I can’t believe the GOP is taking about the redistribution of wealth and socialism—are you kidding me?  I went to college in the early 80s after doing my best K through 12.  While I am no Condi Rice, Barrack Obama or Hemingway, I did well at country county high and was disappointed to learn that I would be paying for college with student loans.  What?


You know the students from families in the middle-income range—to much money for grants but not enough money to write a tuition, room and board check.  If President Reagan thought my parents had the money to fund my education, he should have required them to do so.  To add insult to injury, the guys who played and “cut the fool” for 12 years were in college also—taking remedial classes for a year and a half—wait for it—free!  Because of family income (or lack there of), these students graduated debt free and I ended up graduating with honors and a student loan—the redistribution of wealth. 


Don’t get me wrong, it warms the heart to see friends who grew up facing constant adversity as current homeowners, great parents and pillars of the community.  In retrospect, the route I should have taken was to declare myself an emancipated minor with a mall job and qualified for grants also.


Like the Obamas, my student loan was/is around into my forties and like Senator Obama, I worked as a community service person.  Check this out: if your student loan was based on lack of family income, the federal government will forgive it for doing that type work, i.e. teaching in a rough school.  But, my loan can’t be forgiven because of my family’s income decades ago.  Really?


Republican President Ford signed the Earned Income Tax Credit into law in 1976.  The EITC was designed to offset the burden of payroll taxes for low-income working families and to provide incentives to work.  Presidents Reagan, Bush, Clinton and Bush have expanded the program and I must say helping the working poor get above the poverty level is much better than welfare.  The program taxes one group to give money to another group—Ford, Reagan, Bush and Bush.  What’s the definition of socialism again.


Some people feel that the federal government should think Darwinism or the “Survival of the fittest” went making policy.  While these concepts are controversial, socialism v. Darwinism in the congress in the 90s was Cynthia McKinney v. Newt Gingrich.  Congresswoman McKinney and the well-intended liberals argued that the government should ensure a minimum quality of life for everyone while Speaker Gingrich crafted policies that worked toward giving people the opportunity to achieve if they stayed focused and worked hard.  But, if you did not make it; hey, that’s life, law of the jungle.


Funny thing: those guys from my community who went to college on Pell Grants are with Newt in their mindsets—and Newt is one of the only conservatives who realizes the political potential.  The money they received for college has been paid back many times over in middle class taxes.  

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Am I missing something in these Wall Street/Main Street Bailout discussions: what about student loans?  Most people pay their loans back in a reasonable period and it has always seemed unfair to “bailout” those of us who did not.  Us.  We.  Me.


But, Wall Street speculated on financial products and projects and some homeowners bought (tried to buy) more house than they could afford.  My simple formula for homes would be double your annual income to get the cost of your starter house; pay for that house and use the money from selling that house to buy your next house; of course, the next house would be cash from the first house plus double your annual income again. 


This is not rocket science but the government bails out or spends money on nation building in countries that don’t like us; people who speculated that they could afford five kids on minimum wage; and even people who’s small businesses were illegal.  Yes, we spend $26,000 a year putting a fool in Georgia State Penitentiary but we let his clean-living brother get student loan debt to attend Georgia State University—I am for law and order but these criminals are bleeding us dry.


So, people “invest” in their educations and speculate that the economy will produce jobs to pay back the student loans.  Good kids trying to move forward in a positive way until we realize that the cost of living over 10 or 20 years when up, up, up but the incomes and benefits actually when down—I should have listened better in e-con class.


People are talking about adjusting the bailout plan to let failing firms and banks fail and rescuing the homeowners directly—the same homeowners with finished basements the size of the house they could really afford.   While people can walk away from real estate debt, student loan will always be around until paid– growing exponentially. 


My proposal is simply a “mercy rule” that caps student loan debt as double the original amount.  We can pay for it with Iraqi oil revenue.      

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