I was looking at a (somewhat) local paper on Obama’s student loan order, which led me to recall that whole battle, and wonder where Republicans where on the “government-run” student loan nonsense they were screeching about a couple of years ago.
While health-care reform occupies the spotlight, the Obama administration is pushing for another Washington takeover — this time of the student loan system. Here is what the administration and congressional Democrats have told us about this latest attempt: Starting in July, all 19 million students who want government-backed loans will line up at offices designated by the U.S. Education Department. Gone will be the days when students and their colleges picked the lender that best fit their needs; instead, a federal bureaucrat will make that choice for every student in America based on still-unclear guidelines. They say that this will save taxpayers up to $87 billion in subsidies that now go to “greedy” banks.
He goes on to compare the program to (what else), the DMV:
Finally, the government should disclose that getting your student loan will become about as enjoyable as going to the Department of Motor Vehicles.
That’s his concern. An enjoyable borrowing experience. He wants a frisbee, not for himself, mind you, but for you, because he cares.
First, Obama’s order:
Obama’s plan will accelerate a measure passed by Congress that reduces the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent. He will put it into effect in 2012, instead of 2014. In addition, the White House says the remaining debt would be forgiven after 20 years, instead of 25. About 1.6 million borrowers could be affected. Student loans are the No. 2 source of household debt.
Then, the ridiculous hearing House Republicans held Tuesday:
Many of the reporters who covered yesterday’s House of Representatives hearing on the Direct Student Loan program appear to have missed the main story: the utter failure of the Republican leaders of the House Committee on Education and the Workforce to make their case that the U.S. Department of Education has mismanaged the transition to 100 percent direct lending. In fact, by the end of the two-hour hearing, the House committee’s leaders were forced to acknowledge the Education Department’s success in shifting thousands of colleges out of the Federal Family Education Loan (FFEL) program and into direct lending without any meaningful disruption in service.
This was a remarkable reversal, considering that the original intention of the hearing — which was entitled “Government-Run Student Loans: Ensuring the Direct Loan Program is Accountable to Students and Taxpayers” — was to bash the Education Department.
“Nineteen months ago, the Democratic-controlled Congress approved a federal takeover of the student loan industry to help pay for the president’s health care law,” she said. “My Republican colleagues and I were rightly concerned this political tactic could have unintended consequences on the nation’s students, higher education institutions, and our economy. Any time the federal government assumes control over a private sector industry, there can be national implications.” [Never mind that FFEL was part of the same federal program as direct lending.]
Federal takeover, health care law, blah, blah, blah, all we’re missing is the mandatory reference to the unimaginably horrible DMV, but what about the witnesses you called, Virginia?
But even the witnesses that the Republican chairwoman called to testify — Ron Day, the financial aid director at Kennesaw State University, and Mark Bandré, the vice president for enrollment management and student affairs at Baker University — were not buying it. While the two college administrators talked about the “bumps and challenges” that their campuses faced in shifting to direct lending, they said they considered the transition to be an overall success
Man, I wish I could have gotten my student loans at the DMV. Probably would have gone much more smoothly.
Put US banks and private lenders and typical (public or private) university administration together, and you won’t get a smooth process.
I for one don’t understand why they keep re-electing Virginia Fox. What is her appeal? That she lies poorly? That she looks like she’s out of The 700 Club? Maybe it’s just that I’m too damn coastal….
Blah blah, DMV, blah blah.
Last time I went to the DMV- in Atlanta, FWIW- I had to get a new pic and change my address. That all took about 20 minutes.
c u n d gulag
When you talk about the dumbest motherfuckers in the House, a lot of times we forget about her because Foxx flies under the radar.
Must be her Boeing Stealth Broomhandle.
Now that banks aren’t directly benefiting from student loan debt, I have a strong suspicions that we’ll see a general drum-beat of protest against all federally financed student debt.
Conservative anti-academic think-tanks have already been dropping a few turds in the water:
@c u n d gulag:
I watched a little bit of the hearing. I was starting to feel a little sorry for her, so I stopped. I hate when Republicans do that thing where they feel they have to pretend they have some “private sector” experience on (really) any given issue.
“39 years ago, I got a loan from a bank…”
Jamey: Bike Commuter of the Gods
@D.N. Nation: Exactly: License renewal? In and out in 25 min–and this was on the last day of the month, when all us procrastinators come out of the woodwork. Visit to my private, for-profit doctor’s office? Fifteen minute wait before I was called up to fill out a form — the SAME form I’d filled out at least a half-dozen times before — and tender my co-payment in advance; wait another 15 min; follow a nurse back to an exam room for basic interview about my symptoms; wait another 20 min for a doctor to come in, read the nurse’s notes … and tell me that I need to visit a specialist, because he couldn’t treat me.
So, yeah, I welcome the DMV to take crack at fixing a broken private enterprise. Please!
@c u n d gulag: well it’s hard to get noticed when you have such potent competition, you got the King Bros (Peter and Steve), Louie “anchor baby” Gohmert, the entire AZ Republican delegation, Eric Cantor, John “oompa loompa in my gene pool” Boehner and Mr. Serious (Paul Ryan) all vying for the mantle of most idiotic/odious representative.
Villago Delenda Est
If something happened to Lamar!, like, oh, I don’t know, perhaps he accidentally falls down a flight of stairs from the observation deck to street level of the Empire State Building, I wouldn’t be too upset.
Double for the moronic Foxx git.
James E. Powell
I’ve been living in Los Angeles, a reputed urban nightmare, since the Clinton administration. I have never had any problem taking care of DMV business. I have never had to wait for more than 15-20 minutes. You can make an appointment to reduce that. The people there are all real nice and helpful. I have issues with my driver’s license photo, but that’s more about me than the DMV.
c u n d gulag
I think stupid politicians like her sometimes depend on pity.
I know that they also depend on people who are even more stupid, because who else would vote for someone like her?
@piratedan: You forgot the two idiots from Kentucky in there.
Virginia Foxx is such a moron and an embarrassment, and once my died-in-the-wool liberal mother in law changed her voter registration in order to vote for her in the primary.
Because she got a primary challenge.
From Vernon Robinson, who was fucking crazier than she was. Who called her a radical feminist.
I don’t know what the hell is wrong with that district.
I don’t think I’m the only one who has found trying to address a problem with a bank–almost any bank–to be a horrible, soul-sucking experience.
And as regards the DMV, the only issue I have had with them has been their interior design. Those guys need a much better furniture and lighting budget.
Culture of Truth
It’s “Democrat-controlled.” Sheesh, they’re slipping.
Back in the 60’s student loans, at least the one I got, was from the government and if I had taught for a couple of years (I forget the exact number), the loan would have been forgiven.
Bringing in the big guns, eh? How about the head of the Cal State system, who rely on something like 200,000 federal loans to their students to stay in operation.
Off-topic, but I was wondering what Kay thought of this:
Exclusive: Internal labor memo warns Ohio union fight could go either way
I agree, why all the hating on the DMV? Staff is courteous, there has been adoption of computerization that allows you make an appointment if you want to or do most things on line.
Also, too, the post office for that matter.
Electing Republicans is like putting Micheal Vick in charge of the Humane Society.
The only student loans I have are federal loans, and I’ve never had a problem dealing with the Dept. of Ed. loan people. I was just on the phone with them today, as a matter of fact. My wait time was about 6 minutes, and my question was quickly addressed once I did talk to someone.
Plus, I’d much, much rather deal with the feds when it comes to issues like repayment options, deferrals, forebearance, etc. I have friends who got private loans and they’ve had a much harder time of it.
@TooManyJens: Greg is usually better than that. It seems rather thinly sourced to me. Plus that conclusion just drips disdain for Ohio voters.
Thanks. I don’t know. It’s exactly what the Kasich spokesperson said yesterday. I do know that. The same issue with the wording of the poll.
I’m not doubting that it’s legit (from Rothenburg) but it is the exact same language.
I’m not a good measure because I get personally involved, so I usually don’t make a call either way. I just do my thing regardless of the polls, so I try not to dwell on them or bank on them.
The Other Chuck
Yeah, how dare the Federal Government take over a Federal Loan Program.
C’mon Obama, could you please get on the tv and say that Federal Government recommends breathing?
Too, Jen, they’ve known from the beginning that the whole thing was going to come down to how well they communicated “vote no on two”. They weren’t counting on people reading/responding to the the actual ballot measure language, ever. No one reads ballot measures.
I think the “vote no” and “vote yes” camps are fairly well-defined.
But, we shall see, right?
I don’t know what the point is of Sargent releasing it, actually. His “scoop” I guess.
It was functionally abandoned by the opposition party. That’s what generally happens. You get some guy like Howard Dean who comes along and says “Run candidates in ALL THE STATES!” and he gets called a lunatic, even after he spearheads a Democratic landslide.
Democrats play politics like they’re a pack of accountants crunching numbers toward victory. They’ll vomit a fortune into Andy Weiner’s old district because they think it should be an easy win (if its so easy, why are you spending so much money, idiots?) But they won’t drop a dime into Mississippi because “everyone knows you can’t win in a red state”.
This is exactly what I was telling some concern troll in the student loan thread yesterday. He was all upset over the moral hazard that would be created when students realized that their loans could be forgiven at some point, 20-25 years in the future. Ever since there have been federal student loans, there have been loan forgiveness programs. Sometimes in order to encourage people to go into certain professions (teaching in poor schools, elderly care, early childhood education, and nursing, to just name a few off the top of my head over the years I’ve been doing this stuff) and sometimes to reward those who make on-time payments over a long period of time. For there to be some sort of moral hazard, you have to assume that students are even aware of loan forgiveness. Having administered student aid for about 20 years now, I can assert with complete confidence that most students don’t even realize they have to pay interest on loans, let alone that they might be forgiven those loans at some distant point in their future. And this, despite all the work we do to educate them on their rights and responsibilities as borrowers.
I also think this is bullshit:
That may have been the “conventional narrative” but it’s silly if it was. The recall effort was essentially unprecedented. They did great, considering no one had done it in modern political history. That they didn’t “take back” the state senate isn’t a “signal” of anything, other than how hard it is to start and run an entirely new campaign tactic.
I mean, jeez. They occupied the statehouse, set up an election, and won a couple.
I don’t understand this animus towards the DMV and the post-office, they are efficient and do their jobs quite well.
OK, I’ve been out of school for quite sometime, but I don’t ever remember standing in line for my student loans. I remember filling out a bunch of paperwork at home, mailing it in, and occasionally having to make a phone call to ask a question.
Has standing in line for student loans become a new thing in the last 17 years?
@kay: Thanks. I was just wondering because while I’m sure polling a race like this is a nightmare, it sounded like there have been plenty of other reasons for optimism besides just polls. Not that any of it matters except the actual ballot, of course.
You know that, and I know that, but the conventional narrative is usually profoundly stupid.
Actually, all you have to do is file a FAFSA (online and with a widget to connect you to the IRS website to download your/your parents’ tax information). Your school originates the loan, you sign a master promissory note online the first time you borrow (and never again for the next 11 years), do an online loan entrance counseling program, and, Bob’s your uncle, you have a loan in your student account.
Filling out a FAFSA today takes, on average, about 15 minutes if you have filed your taxes. Completing the MPN and loan entrance counseling another 10-15 minutes. If you complete your FAFSA every year thereafter, your loan will be credited to your bill when it shows up in your email.
This was, most emphatically, not the case just two years ago. Obama has made my job infinitely better.
Two thumbs up for the North Carolina DMV. My interaction with them has always been terrific, even when I get there at the end of the day.
Student loans were always done by the federal government until the Reagan years when he decided that the banks and S&L’s should get in on that money making racket (right after he deregulated the S&L industry). At the time the interest was guaranteed to be no more than (I think) 2.5% fixed. After St. Ronnie turned the loan portfolio over to the banks it was made so that they could charge whatever rate they wanted. So the banks made a ton of money, and if the student defaulted or declared bankruptcy the feds still paid off the loan and interest to the banks. Just another way for the banks to pick the pockets of the taxpayers.
For a year or two there was a transition period where students could still get a gov’t loan, but first had to be denied by at least 2 other banks. That was easy. Just go into the bank or S&L and start insulting the loan officer (a friend of mine noticed that the loan officer he was dealing with was Jewish, so he unloaded a bunch of “Hitler had the right idea” lines on him.). Suffice it to say, he got his federal gov’t 2.5% loan.
No, thank you.
I’m going to an Issue Two event tonight and I’m sure I’ll hear about this.
I’ll be all serene and prepared for it while everyone else has a heart attack :)
Lamar Alexander is recognized as a pretty crappy former president of the University of Tennessee. He is not the type of guy you want to listen to about education.
I’m a financial aid counselor at a major University. We’ve been direct loans since it started about 94-95. Before when it was all government guaranteed (gov had all the risk) private lenders (all the profit and guaranteed) it was horribly inefficient and frustrating to the students plus costing too much (interest and surprise FEES!). The minute the Direct Loans came in, the lobbists for the banks begged permission from Congress to lower their fees/interest rates AND finally improved their service to their remaining school customers. Then the direct loans begged permission to lower THEIR fees in the interest of fairness…then the banks begged etc to the benefit of the students. Prior to that the banks lobbied for higher fees and to keep the department of education from creating anything like direct loans. After, they spent a lot on trying to kill direct loans too but never quite managed it. Competition how is it SUPPOSED to work to our advantage? In spite of foolish capitalists as religion types, the “free” market worked better when the government competed and not when it was banks only who didn’t need to talk in order to see it was more in their interests to fees high and no need to bother about that customer service stuff. I don’t know how the DOE held on to Direct loans because they could never spend the money on lobbying (campaign contributions).
I very much enjoyed seeing the student advantages build up with the years of both programs hating each others guts but it came to an end apparently because of the lousy economy. I’ve never seen clear explanations with evidence but what I’ve heard and seen imply the banks simply didn’t fight very hard to keep their share of the lending when the DOE made it’s most recent argument as to how they did their share of the lending at a cheaper cost (true from what I’ve read over the years). A while before that there had been a big screw up where several private lenders had with no warning got out of the business and left several states with no lenders for their state schools and thousands of students with no lender a couple of weeks before fall term started. This made the Financial Aid departments at those schools very mad…imagine trying to do a search for a reputable lender who can lend millions and install and learn their software in a couple of weeks. I can imagine and it horrifies me.
Supposedly this was caused by the financial losses in asset value meaning the banks made bad loans (mortgage security type not the actual student loans which were guaranteed by the government and its impossible for those to be a loss to the banks), the banks had to by federal regulation have a certain asset to loan ratio in order to BE banks so they couldn’t lend when enough of their assets turned worthless. At any rate student loans were a small share of their business so they walked away from it in order to keep the big part of the business.
The banks routinely lobbied every year to kill direct loans, getting some legislators frothing up at those evil socialist lenders at the DOE. The DOE routinely tried to end the bank loans. Neither happened until now and it appeared that the banks didn’t bother to fight that last time. It looked to me like they had bigger problems and couldn’t spare the time or money to fight back and some of them left the student loan business on their own before this move even began.
If you didn’t stand in line 17 years ago for loans you were lucky. The system was horrible. I was a student assistant and then a new financial aid counselor then and it was really stupid how bad the service from the banks was until direct loans put the fear of lost business into them.
I just got plates for a new (to me) vehicle from the DMV office. Took longer to find a location that was still open (budget woes) than it took to do the transaction (less than 5 minutes).
Finally, the government should disclose that getting your student loan will become about as enjoyable as going to the Department of Motor Vehicles.
Conservatives have this bizarre obsession with the DMV as a supposed hell on earth. Now, going to the DMV is not fun (and why should it be?), but it’s at least effective: you enter, get a number, fill out some forms, wait around for a bit, go to the counter, hand in your forms, and boom, you’re done. It’s never taken me more than one hour, tops, and ususally it’s about 20 minutes. One could only wish that most other major bureacracies (I’m looking at you, Verizon/BOA/Time Warner Cable/American Airlines etc.) operated as swiftly and efficiently.
When I moved to Virginia in the 1980s the DMV was awful. Long lines, inefficient, rude. For well over a decade though whenever I’d had to go they’ve been fairly fast and efficient. I had a rude person once but otherwise they’re pretty painless. God knows I’ve had clerks in private businesses that were worse..
If you want to scare people, tell them it’d be like dealing with their health insurance company. THAT’S Hellish
I note from your story that the banks did not compete with each other at all on price or service. They were only forced into competing by having the government as a competitor.
Ain’t capitalism grand?
Exactly. The banks acted as if they were conspiring but it was really just obvious self interest NOT to really compete. I believe there are historical precidents. People need to notice actual behavior versus theory. I had just graduated with a degree in finance, too so it was really interesting. If you didn’t have this blinkered view that assumed government was never competing, it was text book capitalist theory. I did not predict the actual results and I was surprised. I think it was good for me.
Do these concern trolls who are so worried about applying for college loans resembling a trip to the DMV know how long would-be voters had to wait in line in the last few Presidential elections?