President Obama has signed a major revision to the student loan program. This was included as a part of the health care services and insurance legislation.
The only connection between the two I can detect, is the president claims the revised student loan program will generate over $60 billion in savings over current programs.
He needed “savings” to help float the health care legislation.
Does anyone think that replacing local banks as a private industry contact point and replacing them with a federal agency that does not now have comparatively widely distributed local contact points will save money and provide equal access?
Look in the local phone book under federal agencies.
Lots of entries, but none “Education Department.” Phoenix is probably as close as they can be found now. They have no extensive involvement with individual citizens as applicants for services. That’s why they don’t have local offices around the country.
I checked only one local bank. They used to offer student loans, but not anymore. I didn’t check any other local banks. Perhaps some others may still offer student loans. The “middle man” the president brags about eliminating, appears to have quit. But if you want a student loan for the fall semester, your friendly federal government won’t start their program until July 1, 2010.
Do you believe that an applicant can find where to apply and get an answer back in time for fall start of classes? It’s perhaps possible. I’d hate to need that loan to start school this fall.
This change in a long established program won’t provide better access to services, and is unlikely to generate cost savings either. Yes, loan interest will decrease from 8.5 percent to 7.9 percent, but that decreases program earnings, which is not program cost savings. Various increased loan forgiveness features will also decrease program earnings from those in current repayment arrangements.
The president has made student loans less available geographically, and will have to replace private employees with additional government employees. We don’t need “savings” like that. Remember this when you vote in November.