here is a thought, why doesn’t the Gov’mnt get out of the loan business. Put the money towards the New GI bill, and build up a new standing military force? Then afterwards they can be students on the GI bill :-)

Greg

Greg, at 12:40 pm EDT on July 23, 2008

Federal Direct Loan Program Should Be Encouraged

Although there are certainly times when students might need recourse to an alternative (ie, private)loan, in the vast majority of cases federally-backed loans, as with the Stafford and Perkins loan programs, should be adequate for students attending public universities; moreover, they have low, fixed interest rates and students in need of an emergency deferment after graduating from school, can easily get one without the risk of incurring steep financial penalties, as happens with private loans (I know from personal experience). Virtually all private loans have exorbitantly high interest rates and most lenders will only allow students to defer them for a maximum of “6″ months upon graduating—even if one decides to return to school again in the future (again, personal experience)! The bottom-line is that issuers of private loans—like with credit cards—are in it purely for making a lot of money in as short amount of time as possible, to please their ever-restless shareholders. Now that Congress has increased the aggregate (ie, total) federal loan amounts that both undergraduate and post-graduate students are eligible to receive, this should greatly alleviate a lot of the financial stress students feel when financing their education, and mitigate the need for unwisely reverting to the private loan market (especially if students can just hold back a bit on purchasing that new car or laptop right away).In short, hopefully universities and colleges—not to mention high school counselors—are clearly emphasising this awareness to their students; for students’ long-term future financial health is no less than at stake here!

Mark, graduate student, at 5:00 am EDT on July 24, 2008

George Bush: Wall Street got drunk...

If I hear one more person say the lenders are losing money on GUARANTEED loans, I’ll scream. This is THE BIG LIE that some folks are trying the sell the public in hopes that the feds will jack up rates again. Even George Bush now says that much of this current credit crunch is because “Wall Street got drunk.” To paraphrase the President’s comments, much of this mess was created by the greed and stupidity of the investment community trying to game the system with “no income verification loans", “off balance sheet transactions” and “crazy quilt investment vehicles” so convoluted and byzantine that, in many cases, you can’t determine who actually owns the underlying asset!

As I’ve written many times before, if the banks were really losing money, there would be no FFELP program. Gimme a break.

feudi pandola, at 11:10 am EDT on July 24, 2008