College aid reform could be costly for some Utah banks, credit unions

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  • Almost a graduate
    March 30, 2010 11:23 a.m.

    Just an FYI to everyone: Banks and credit unions do not control the interest rates on student loans. Congress decides each year what the next year interest rate will be. The feds payed some (not much) to private lenders so they would stay in the business of providing the money to fund loans. Banks and CUs can charge what they want on all other loans but student loans. They are at the mercy of congress for that. That is why the student loan rates are lower than other lending products. The good thing about banks and CUs is that they can lower the interest rate on a student loan if they choose; and they usually do if you have a good history of making payment toward your studnet loan. It's a benefit. You will not get this benefit from the feds. Students will pay more for their loans if the feds take over. It's simple math to figure that out. Also, the 10 year forgiveness is the biggest joke in the world. Student loans are amoratized on a ten year schedule. Foregiveness will not be an option. Think about it.

  • Greedy Government!!
    March 24, 2010 5:05 a.m.

    Why are we going to allow the government take over of all our lives? An America where everything is run like the post office is not the America I want to live in.

    Absolute power corrupts absolutely!!!

  • Red Tape
    March 23, 2010 7:30 p.m.

    This legislation will cause much more red tape in getting loans. Government is notorious at getting things wrong. I worked for the Federal Government in Washington, DC where I learned you had to be really patient because things would go wrong. For example, when I was divorced my name changed from S Davis to S Anderson. I found my name was changed to A Anderson. I still can't get rid of the letter "A" as my middle initial and just gave up because it wasn't critical. But this is typical.

    Also if you remember from the State of the Union address, all loans will be forgiven in 20 years or 10 years if you get a government job. I see the possibility of a really high repayment default rate with tax payers footing the bill. Back in the 80's when I was at the University of Massachusetts there were numerous students who had no intention of paying off their loans. No doubt this will only increase.

  • Greedy banks
    March 23, 2010 9:37 a.m.

    The banks needed to get out of the student loan business. More money for students. Less money for our TARP loving, corporate welfare banks. The bank mentioned in the article is one of the worst and they took TARP money. Boo, hoo. I'm sure to make up for this lost revenue they will charge us more FEES!

  • Reality
    March 23, 2010 9:02 a.m.

    This move will not save student borrowers money. The interest rate charged to students does not go down with this bill. In fact, moves by the government to reduce subsidies to banks and now totally take over the federal student loans has increased borrowing costs to students. My older daughter who received bank loans several years ago was able to reduce her interest rate several percentage points because of benefits offered by the lender and loan servicer. My youngest daughter's loans, which are now held by the federal government along with her future loans, will not benefit from reduced interest rates because the government does not offer such benefits.

    This takeover is using student borrowers' money to support health care and increased Pell grants. There is no savings whatsoever to students who will be getting federal student loans from now on. If the Administration was interested in helping students they would reduce the interest rate at this time when other rates are low.

    This bill has no effect on the number of people who can get a loan except for those attending schools that are not yet set up to deal directly with the government instead of local lenders.

  • re: anonymous at 6:24
    March 23, 2010 7:07 a.m.

    The article stated that the cost of the loans to students will not change. Please read it. There will be no lower costs to students. The claimed purpose of the bill is to lower costs to the government. "The Congressional Budget Office is projecting that student loan reforms passed by the House would save more than $60 billion between 2010 and 2020" I would really like to see that tracked, I would be surprised if this saved the government anywhere near what they are claiming it will.

  • NO to bank bailouts
    March 23, 2010 6:54 a.m.

    This is simply cutting off the welfare checks to banks. If you do not believe in corporate welfare you support this move. The banks destroyed our economy, even with all of their government subsidies. It is time that banks stand on their own, enough to the pipeline of federal dollars propping up the banks. Good job Congress!

  • Bad to worse
    March 23, 2010 6:25 a.m.

    If anyone thinks student loans were expensive before, just wait until the government bureaucrats meddle with them and "reduce the costs."

    While the paper cost to the student may appear to decline, the cost to the taxpayer will soar.

    Overhead costs will increase, borrowing money from China will add to the cost, and ultimately future generations will be paying for this vote pandering boondoggle along with the rest of Obama's socialist accomplishments.

    If we are not totally bankrupt and collapsed as a nation by his spending first.

    This had NOTHING to do with health care, and was only another example of the Alinsky "never let a crisis go to waste" tactic.

    Loans were expensive before, but they will be more so now that they are "free."

  • awsomeron
    March 23, 2010 4:40 a.m.

    I am in favor of everyone getting a College Education in a Vertical position.

    I see nothing wrong with this and I was one who did, in part go into the Service in order to obtain a College Education later. We called it studying the G.I. Bill.

    It made for a good 2nd job and can be great social fun, and as I did in the end you can obtain a degree. I obtained mine at age 59 in 2006.

    The good thing about the Government taking over student loans is that the Government will get their money back in most cases.

    Tax Returns, and if nothing else SSI later on.

    When I went to a JC in the 80's the cost was $15 a Credit. I thought as it got more expensive that the Drop Out Rate would Drop my Son says that is not the case.

    Education is the one way out of poverty.

  • lost in DC
    March 23, 2010 3:00 a.m.

    Actually, | 9:29 p.m.

    No, student loans will become more scarce. The feds have been guaranteeing loans, but banks and credit unions have been providing the capital - the feds have only stepped in and reimbursed the lenders when a borrower has defaulted. With the source of capital now more limited, fewer students will get loans.

    If the feds wanted to cut out the middlemen and make lending cheaper and more available, why don't they cut out all private lenders altogether? It's because they don't have the money. Even with SBA loans (guaranteed loans to small businesses), they don't provide a nickel unless the borrower defaults.

    Take away sources of capital and suppress the cost, and you will have less availability. simple economics.

  • Rich
    March 23, 2010 12:04 a.m.

    Headlee, here's the connection between health care and student loans. The health care bill is an effort to put the federal government in charge of our lives and to punish companies that make a profit. Taking over the student loan program also allows the feds to punish companies who are trying to make a profit and to have more control over others.

  • Actually,
    March 22, 2010 9:29 p.m.

    more students should be able to get loans. The feds have been subsidizing them all for ages; now they are simply the direct source.

  • lost in DC
    March 22, 2010 7:53 p.m.

    the last time congress decided to "help" students by capping interest rates on student loans, the availability of the loans fell dramatically.

    Fewer students are going to be able to get loans.

  • Anonymous
    March 22, 2010 6:24 p.m.

    notice how biased the headline is toward wealthy banks - the headline could have been "Students to benefit greatly from lower student loan costs".

  • Same money different name
    March 22, 2010 6:12 p.m.

    Can the existing staff at Institutions of Higher Learning handle the additional influx of loan requests? Has GAAP been expanded to Financial Aid offices nationwide, eliminating the "re-age" practice helping lower delinquency numbers on the direct loan portfolios? Will tuition continue to reflect a spike in direct proportion to new loan limits? It's just another interesting part of this chapter in Congress.