Why?

SWGB,

What is it with you and FOX News? You say this all the time as if it discredits someones point of view. You could say that about Glenn Beck just as you could make the case about Keith Olbermann. One person doesn't discredit an entire News Channel.

:scratch:

Not joining in this conversation, but Glenn Beck and Keith Olbermann are not news reporters. They are entertainers paid to get their own personal opinions out there to generate thought and feedback. If they didn't piss people off and get under their skins they would all be fired for not doing their jobs...

Back to "WHY?"

From the Wall Street Journal...

The Obama administration plans to make the government the sole provider of federal student loans, ending the participation of private lenders in the program.

Under a plan unveiled in the administration's budget, subsidies to private lenders would be eliminated, and the government would use the savings estimated at $47.5 billion over the next decade to help bolster the Pell grant program for low-income students.

If approved by Congress, the plan would effectively end government-guaranteed loans to students by banks and other private lenders?lending that has totaled $56.7 billion in the current school year, and has been the primary source of college financial aid since the program was launched in the 1960s

Sorry Andy...I know you said no quotes, but I had to show that I was not incorrect...

Again, the misinformation available about student loans is endless. I had to explain to a CPA once what "capitalized interest" was.

Let's do a little math shall we?

The total of $56.7 billion includes all subsidized, unsubsidized, and parent plus loans. Unsubsidized and parent plus loans do not qualify for interest subsidies by the government. So approximately 1/3 of that number is eligible for subsidies from the federal government of about $18,900,000,000.00 give or take.

Interest on a student loan accrues from the date it is disbursed or sent to the school, either electronically or via check. Student loans accrue interest based on the SDI or simple daily interest formula. That formula is as follows:

Principle X Interest Rate / 365.25 = The amount per day in interest you accrue. The current interest rate is 5.6%. So here's some numbers for you:

1 day of interest - $2,897,741.27
30 days of interest - $86,932,238.19
3 months or 1 quarter - $260,796,714.58
4 quarters or 1 year - $1,043,186,858.32

That amount of interest that accrues in one quarter on subsidized loans is paid by the federal government to private lenders every quarter. I have seen one of those checks and it would make a lottery winner feel like they were being short changed. This is only on the loans that were disbursed last year, it does not include the loans that are already on the books.

Those subsidies are paid for the life of the loan anytime the student is enrolled at least halftime in school, the six months after graduation or the student is no longer enrolled at least half time. They also receive the subsidy when a student qualifies for a deferment. Deferments can be given, depending on when the loan was taken out, due to unemployment, pregnancy (only available on older loans), economic hardship, internship or residency (only available on older loans), military service (only available on older loans), national service (only available on older loans and specifically for Peace Corps and Ameri Corps), and if a student goes back to school at least half time.

That just covers the interest subsidies. Let's not forget that of that $56,700,000,000.00 all are subject to originations and guarantor fees deducted from the total loan amount upon disbursement. At minimum that amount is 1.5%. So using our calculators we come up with a total amount received last year of $850,500,000.00.

Also to clarify here are some of the limits to which you or your child are held to for these types of loans. The difference is made up with scholarships and private loans.

DependentAnnual loan limitFreshman$5,500
($3,500 between subsidized and unsubsidized, plus an additional $2,000 unsubsidized)Sophomore$6,500
($4,500 between subsidized and unsubsidized, plus an additional $2,000 unsubsidized)Junior or senior$7,500
($5,500 between subsidized and unsubsidized, plus an additional $2,000 unsubsidized)IndependentAnnual loan limitFreshman$9,500
($3,500 between subsidized and unsubsidized, plus an additional $6,000 unsubsidized)Sophomore$10,500
($4,500 between subsidized and unsubsidized, plus an additional $6,000 unsubsidized)Junior or senior$12,500
($5,500 between subsidized and unsubsidized, plus an additional $7,000 unsubsidized)Graduate or professional$20,500
($8,500 between subsidized and unsubsidized, plus an additional $12,000 unsubsidized)
Lifetime limitsUndergraduate dependent lifetime limit$31,000
(up to $23,000 may be subsidized)Undergraduate independent lifetime limit$57,500
(up to $23,000 may be subsidized)Graduate or professional lifetime limit$138,500
(up to $65,000 may be subsidized) or $224,000 (for health professions). Limits may vary by school. See your financial aid officer for more information.

SO basically the taxpayers have been paying banks like Sallie Mae the interest that is being "deferred" on the loans............w/ no reimbursement.

And now we won't?

I agree it sucks in this case but #5 is because the law allows it under Federal Rule of Appellate Procedure 39. Rules

Sounds a lot like the democrats estimates on the cost of Obamacare. Heck, that pretty much sums up every estimate the federal government has come up with for pretty much every healthcare program they've implemented.

Nobody should be surprised if the expansion of government workers is larger than predicted, and nobody should be surprised if 250 billion annual cost of Obamacare is, hrm, underestimated.

Can you show evidence they are hiring 16,000 new IRS "agents "?

SO basically the taxpayers have been paying banks like Sallie Mae the interest that is being "deferred" on the loans............w/ no reimbursement.

And now we won't?

That's the whole point of it.

I'm sure if someone wanted to dig through the budget they could find that line item and crap themselves.

#5 is a BIG WHY--one in which both the Left and the Right can agree on, or seem to. Hope the Supremes can help fix that outrage!

Can you show evidence they are hiring 16,000 new IRS "agents "?

Obviously not at this point, Obamacare won't be putting guns to people's heads until 2014. My point was that generally government programs, particularly those that revolve around healthcare benefits, always end up costing far more than initial estimates.

So based on past evidence, Obamacare will cost American taxpayers more than currently projected. If it falls in line with other major healthcare benefit systems like the prescription drug benefit program or Medicare, we can expect costs to be anywhere between 5 to 10 times higher. For fun, take the estimated cost of your party's new 250 billion entitlement and do some math.