Government Profits on Student Loans while we suffer

Should the US Government be profiting from student loans?  Is the government’s job to “make a profit”?

One of the reasons the economy is not in great shape is because students are so in debt trying to pay back student loans.  (Let’s leave the discussion about why college costs so much for later).   If money is being spent paying back loans, it’s not getting spent on homes, cars, appliances, and goods that help the economy as a whole.    loans

A recent bill would have reduced the student loan percentages to a reasonable amount (but still, ironically, higher than when the government lends money to GM and the banks).  It was shot down by Republicans (duh).  Why?  What possible reason would they be against this?  How does this bill do anything but help all students, liberal and conservative alike, from blue states to red states?

Oh, right.  It was being paid for by increasing taxes on millionaire and billionaires, and we can’t have that, because they’re the “job creators” who will stimulate the economy.  (Remember that?  When the Bush tax cuts first went into effect, they were supposed to do that?  Remember when that happened?  Ha ha!  Aren’t we a bunch of chumps!)

So once more the government took the side of the 1%, ignoring 99% of the people they are supposed to be representing.

One of the reasons it failed as well is because of all the lies being spread all over the internet about it.  More than once I tried to explain to people who falsely claimed that this was “an Obama loan forgiveness program” that would let students get off without paying anything.  “I paid my loans, how can these freeloaders get away with it?”  Facts never matter to these people, and of course, only a few would admit that the law did no such thing, but you can guess which news station was promoting that meme, can’t you?

 

8 thoughts on “Government Profits on Student Loans while we suffer

  1. No, the government should not be making money off its student loan program. Nor should it be losing money. The whole reason to set the interest rate at a given level is to cover those who default on the loan. Yes, I said the _whole_ reason. There is no reason to set it to any other level.

    Thus, the taxes on the “millionaires and billionaires” * wouldn’t be covering losses in the student loan program; they’d be covering the money the government is _not_ getting as profits from students. This isn’t “paying for the program”; this is just paying for the government.

    So from the perspective of “who should the government be charging more for its costs?”, I will agree with you that it shouldn’t be fresh-out-of-college former students.

    * …which always seems to trickle down to sub-millionaires after a while, but we can let that slide for now.

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  2. I paid back my loans. But that was because I didn’t have to take out a backbreaking number of loans to get through college, for various reasons, but largely because college wasn’t proportionately nearly so expensive.

    I wouldn’t necessarily be against a loan forgiveness program, in some ways. But what’s really needed is something that puts education back in the “affordable” box, because right now it’s not.

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  3. There should be a discussion about “type of degrees”. And the universities themselves.

    The “professional” degrees tend to make their money back, be it lawyers, doctors, computer scientists, business majors, etc.

    But we also in theory want liberal arts classes for students. The humanities.

    To become a fulltime professor of a history, english, film studies, or any of the classes that “round out” the education, you still need a PhD. In theory you want someone from a top school. Top schools cost top money. Fair enough, its your decision to spent 8-10 years of your life doing this. (very few people can get this done in the theortical 8 years. These days, this means your takling over 150K going to schools.

    Because PhD programs are hard to get in, it used to be believable that you could get a job as a professor after you published, and while would never get rich, be able to pay off this massive debt. The average salary of a professor was about 50K starting. Not amazing, but not terrible.

    However, in the late 90s, and early 2000s, universities started to change what they were doing. They started hiring the majority of their new teachers as adjuncts (when i went to college it was the opposite). Adjuncts still require a masters, but they pay them VERY little.. 2-3K per class per semester, no benefits. They also share an office, so office hours become very difficult. 3k a class doesnt sound horrible, until you realize that with prep work, you cannot handle more than 3 classes a semester, and about 1/2 the work is done at home. Lets say you have a VERY good adjunct union, you might get 4K/class, so that equates to 12Ksemester, or 24K/year. Most equate to about 18K/year.

    Students no longer get professors that are in the school, because adjuncting becomes a secondary job, and the ones who had dedicated 10 years of their lives to in theory teaching the next round of college students likely are in massive debt and will be for the rest of their lives.

    Meanwhile, Universities, guaranteed that the students will get massive loans, keep upping their prices. State schools cost upwards of 18K/year. Private schools sometimes 40K or 60K/year.

    The universities have realized they can make a killing on the backs of professors, and nobody ever calls them out.

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  4. I know this was going off topic. But getting back to the topic, is it not unreasonable to think that certain types of degrees will be able to pay them back, so the government can reasonably ask to make a profit on those? Others, are going to not make money on those degrees, so is it not reasonable to assume the government can lose money on those?

    If you get a degree that makes it possible for you to earn 200,000.00/year with VERY hard work, its not unfair for a little bit of profit to be made on those loans. If someone else, with the same level of hard work can make 1/3 of that, but the cost of the degree is the same, then, if we as a society want people doing those jobs, then we as a society should be willing to say, “ok, we have to subsidize that”. Either that or we have to change the requirements of colleges, and make these “rounding out” classes no longer required, and make it all about profession schools.

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