Michael
Apr 28th 2009, 11:56 AM
So, let me see if I understand this issue correctly.
US government supplies the money (essentially a government guarentee to cover the value of the student loan) to private banks who then turn a very large profit 'selling' these loans to students. And the Government pays a fee to these banks for undertaking this service.
The private banks take zero risk (guarenteed by government), but get to keep any profits they make from the process - plus the fees from the Government (and by giving 'kickbacks' to collage loan administrators, they actually increase the volume of business).
Like who cooked up this game of crony capitalism & corruption for private profit at the expense of taxpayers? :eek:
Kudos to Obama for proposing to eliminate the inefficiency and corruption this entails and replacing it with a 'normal' student aid type system administered directly by the government. Students still get the same money, the government still covers the debt, but the corporate middle-man and all the privatized profits are cut out of the deal saving literally billions of taxpayer money.
Can anyone explain to me why there is controversy here? Or why the Republican party is fighting tooth and nail against this measure to save the taxpayer billions of dollars? Didn't they just have a bunch of tea-party things protesting against government waste? Obama is doing something about one particularly wasteful program and the Republicans have their knickers in a knot over it? :ummm:
US government supplies the money (essentially a government guarentee to cover the value of the student loan) to private banks who then turn a very large profit 'selling' these loans to students. And the Government pays a fee to these banks for undertaking this service.
The private banks take zero risk (guarenteed by government), but get to keep any profits they make from the process - plus the fees from the Government (and by giving 'kickbacks' to collage loan administrators, they actually increase the volume of business).
Like who cooked up this game of crony capitalism & corruption for private profit at the expense of taxpayers? :eek:
Kudos to Obama for proposing to eliminate the inefficiency and corruption this entails and replacing it with a 'normal' student aid type system administered directly by the government. Students still get the same money, the government still covers the debt, but the corporate middle-man and all the privatized profits are cut out of the deal saving literally billions of taxpayer money.
Can anyone explain to me why there is controversy here? Or why the Republican party is fighting tooth and nail against this measure to save the taxpayer billions of dollars? Didn't they just have a bunch of tea-party things protesting against government waste? Obama is doing something about one particularly wasteful program and the Republicans have their knickers in a knot over it? :ummm: