Saturday, September 8, 2007

The U.S. Government Forgives Student Loans - For Its Own Employees

It Really Pays To Work For The Government!!

Forbes featured this news story about how the members of Congress have given themselves and their aides forgiveness of federal student loan debt.

So if you are a full-time public service employee (including law enforcement, or the military, public health, teaching and of course, the government) then you can take advantage of one of the provisions of a major education bill that was just passed which forgives the balance on your Federal Direct Loans if you have made at least 10 years worth of payments on those loans.

The articles says this:
The bill, known as the College Cost Reduction Act, is designed to provide $20 billion in student aid to borrowers by reducing government subsidies to lenders. The money saved will be used primarily for student grants and scholarships, including a $1090 increase in individual Pell Grants for needy students by 2013. It also reduces interest rates on many federal Stafford loans by 50% by 2011, and it includes $500 million in aid for predominantly minority colleges. President Bush is expected to sign the legislation into law soon.

“Our loan forgiveness program will allow students to follow their hearts and dreams into professions they love, rather than choosing jobs on the basis of their student loan burden," says Sen. Edward M. Kennedy, who chairs the senate education committee. "All of us will benefit as a result.”

Maybe. But the loan forgiveness provision raises eyebrows, and not just because it would directly benefit people who work on Capitol Hill. It's also a tasty treat for loyal political donors such as the American Federation of State, County & Municipal Employees (AFSCME) and the Service Employees International Union (SEIU)--the largest organizations representing public service workers.

According to the Center for Responsive Politics, a watchdog group that tracks political fundraising, AFSCME has given nearly $38.7 million to politicians since 1989--more than any other group in the country. SEIU was the ninth biggest donor during the same period. Both groups raise more than 90% of their funds for Democrats. Among their top recipients are members of the House and Senate education committees, including Rep. Phil Hare, D-Ill., Rep. Bernard Sanders, I-Vt., Rep. Carolyn McCarthy, D-N.Y., Sen. Sherrod Brown, D-Ohio, and Sen. Hillary Clinton, D-N.Y.

SEIU spokeswoman Stephanie Mueller says the union was not actively involved with lawmakers in crafting the legislation. AFSCME officials could not be reached for comment Friday.
I have absolutely no problem with relieving members of the military or law enforcement of their loan obligations. They put their lives on the line for Americans everyday that they serve. But, I guess all of those Poli-Sci majors working as Congressional aides really cashed in. So who picks up the tab of those forgiven loans? I'll give you a few guesses...

I have the opinion that this may be a move by Democrats like Ted Kennedy to begin government paid secondary education - in fact presidential candidate and US Senator from CT, Chris Dodd, has already expressed a desire for the government to provide a "free" college education to every student - free of course meaning taxpayer funded by YOU and ME (and those students would be attending State Universities of course).

So let's see - taxpayer funded universal pre-school and taxpayer funded k-12 education and now taxpayer funded college education... Oh and let's not forget taxpayer funded universal healthcare... Will I get to keep any of the money of our family income? Probably not - and that folks is Socialism and redistribution of wealth. Plus it is government controlled education from age 3 to age 22. (Now here is an interesting read and here's another on that topic)

"A tax supported, compulsory educational system is the complete model of the totalitarian state." --Isabel Paterson

"Let me control the textbooks and I will control the state. The state will take youth and give to youth its own education and its own upbringing. Your child belongs to us already….what are you?" --Adolf Hitler


Blueberry said...

Excellent post!

Vaandoo said...

I believe that its a good plan and it will have good response among the public. Taking care of the employees will result in having a happy employee and good for the country in the long run.

Judy Aron said...

Happy employees? At whose expense? Someone has to be picking up the tab that has not been paid. Looks like it's the people these employees are supposed to be serving... the taxpayer.
The rest of this bill may be good but this is just another example of the government serving itself with money from Joe Taxpayer.

Jennifer said...

The entire student loan system needs to be abolished. There is no reason for college costs to consistently rise so much higher than inflation, except for these asinine subsidies.

If the entire loan system were wiped out today, only about 1 or 2 percent of today's college-age people could afford current tuition rates. So do you think the colleges would say "Whoops, we have to shut down for lack of paying customers?" Heck no--they'll bring prices down, rather than squandering government-subsidized tuition money on self-esteem seminars and athletic palaces.

Poly Muthumbi said...

While many Student Loans Institutions are now available for all the students, some are offering loans with very high interests that are proving to be very expensive. The Government Student Loans have solved this problem by providing low cost and manageable loans.
Poly Muthumbi, a Web Administrator, Has Been Researching and Reporting on Student Loan Consolidation for Years. For More Information on Government Student Loans, Visit Her Site at GOVERNMENT STUDENT LOANS

Anonymous said...

I feel that anyone who uses student loans to pay for college and actually complete their degree should have their total loan debt forgiven regardless of what entity they work for. When we graduate and find a job, we have taxes withheld from our pay, we file and pay taxes annually, we are generating revenue in the economy by buying goods and services and paying taxes on these goods and services, we are paying sales taxes on our automobile purchases, yearly tags and registration fees, and we pay property tax on our homes. Clearly the government is in a sense going to get a return on the debt they are forgiving. Student loans should be viewed by government as an investment in society's future. If a person receives student loans and withdraws from school after receiving "a refund" and does not complete his or her degree, then by all means that person should be required to repay the loan in its entirety. Even if the gov't won't forgive the entire loan, a percentage of the loan debt should be forgiven for every year that person remains employed and pays taxes. After all, isn't it much cheaper in every form to pay for someone to go to college and see a return on that investment than to pay for a criminal to be locked up and taken care of by the same taxpayers who are not costing them any money, but who are instead generating money into the economy through purchases of goods and services and through paying taxes? Do the math, what is more expensive: a 4 year college tuition or a 4 year prision sentence? Really think about it: A graduate leaves college with a burden of debt that the government is waiting on repayment for and a criminal leaves prison with no financial debt. I know some would say, the prisoner has paid their debt to society by being "locked up" well, I say college grads have paid their loan debt as well by graduating, becoming employed, and being productive members of society.

Victim said...

In November of 2007, The Dept of education contacted me about loans I thought were discharged in bankruptcy in 94. This was the first time they contacted me since then. My new "student loan" education has been on the fast track.

What I have found, is that since 1990, there is clear historical evidence of recomended changes that needed to be applied to the student loan industry that congress has ignored at the cost of the students, and now, it is comming to a head.
Now the industry itself is saying NO to it, and companies are bailing out. GOOD. I hope the whole damm system breaks down. I hope default rates skyrocket to 50 percent or more.

Government failed to impose oversite on the schools that were promoting government student loans. Most kids were not told that if they signed the paperwork, that congress could change the terms of the contract at will, and impose the new conditions on the students. That means when they removed consumer protections, they screwed a lot of students and turned them into debt slaves. That is just plain wrong.

IF you served your country in the military at any time and got out with an honorable discharge, your loans should be forgiven. PERIOD.

If government can piss away 1 billon dollars every 8 hours, they only have to spend 14 hours worth of time to pay off every student loan now in existance.

Time to stop victiminzing the students.

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