Once upon a time student loans were all under the control of the Federal government. THen someone thought gee golly lets do a Freddie/Fannie deal with student loans.
Here's how it worked.
All the money for the loans was printed by the FED and loaned to the banks at virtually zero interest. The banks then loaned the money to students at 4% subsidized and 6% unsubsidized. The banks didn't even do their own paperwork. That was all done by Sallie Mae and the cost charged to the students at an obscene points rate.
Now here is the kicker. The banks took exactly ZERO freakin' risk on the student loans, nada, nihil, bupkus. The goverment took 100% liability for defaults. It was like a licence to steal from the US TREASURY. Obama ended all that. You wonder why Wall St. turned on him. That alone would PO all those crooks buying their yachts with yours and mine money.
But now Obama has stepped it up a notch. The for profit education industry has a real racket going. about 90% of the for profits' revenues come straight from student loans. Get the student in, get them on financial aid, and get fat. The way the loan works, the students get a nice cost of living allowance above their tuition and that attracts many students not really qualified or interested in an education. What the hell do the schools care. The students get their colas for a couple of semesters, quit or bust out, and move on to the next for profit and do it again. No wonder Jack Welsh bought his own for profit.
But now Obama is requiring the schools to pay back the student's loans who flunk or quit. The program just started and believe me the for profits aren't happy but it sure is good for the taxpayers.
So Obama rubs the noses of two huge special interest groups ( Gore and Clinton both lobby for the for profits, big-time) and the taxpayers benefit.
You won't hear about this on FAUX.
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