The Bank On Students Loan Act

[ReticulatingSplines]

@Honesty

She might be a politician, but her vita (without pubs) outclasses every single person here, including yours. If we are to take your opinion over hers, could you post your vita for us to see?

Thanks

• Honesty

The Unabomber went to Harvard. What’s your point? That just because she’s an accomplished academic, that makes her immune to pandering to people who don’t understand banking, like you?

[Really_Not_All_That_Bright]

@adaher

We should also stop student loans for law degrees temporary until the market for lawyers tightens. Right now, law students have very little chance of ever paying off their law school loans due to the glut of lawyers.

They’ve already cut off subsidized loans for law students (and all graduate students, in fact). People who have to leave law school halfway through will have a damn sight less of a chance of paying off their loans, I can assure you.

[Honesty]

@ReticulatingSplines

The Unabomber went to Harvard. What’s your point? That just because she’s an accomplished academic, that makes her immune to pandering to people who don’t understand banking, like you?

She didn’t just go to Harvard, she’s been a professor and publishing papers since the 1980’s. Again, where’s your vita, Sir? It’s also curious how everyone in Congress has someone batting for them, but one Senator who tries to do something for the people, and she’s pandering. You know, I think, if Sen. Warren is “pandering” or being a “populist”, then I hope she continues it.

• Honesty

[Honesty]

@Really_Not_All_That_Bright

They’ve already cut off subsidized loans for law students (and all graduate students, in fact). People who have to leave law school halfway through will have a damn sight less of a chance of paying off their loans, I can assure you.

This must’ve happened in the last year because I was in grad school and took loans no problem. Do you have a cite on that?

[Really_Not_All_That_Bright]

It did, and my tuition is my cite. It was effective for the 2012- academic year.

[ReticulatingSplines]

@Honesty

She didn’t just go to Harvard, she’s been a professor and publishing papers since the 1980’s. Again, where’s your vita, Sir? It’s also curious how everyone in Congress has someone batting for them, but one Senator who tries to do something for the people, and she’s pandering. You know, I think, if Sen. Warren is “pandering” or being a “populist”, then I hope she continues it.

• Honesty

What is your silly obsession with academic credentials? Seriously, you missed the whole point of college if you can’t think for yourself.

For the record, I have met Sen. Warren and I like her and respect her. I think she is very intelligent and I admire her commitment to consumer protection. But that doesn’t mean this bill is a good one, because it’s not. I’ve told you why, and you have brought nothing other than bleating about:

1. How banks borrow at a certain rate in some dire situations and so all students must also be allowed to borrow at the same rate JUST BECAUSE, and
2. How the bill must be great and I am wrong because she taught at prestigious schools.

Please. Just answer the question. Why must student loan rates equal discount window rates? The discount window is virtually risk-free for the Fed. That’s why interest is so low. Student loan rates are high because they default at high rates and someone has to pay to service the loans. Should they be lower than 6.8%? Perhaps. But why 75 bps? It’s totally arbitrary and is nothing more than populist “fuck the banks” propaganda that you’re buying hook, line, and sinker.

[adaher]

It’s also “fuck the taxpayers”, since the taxpayers pay the loans when they default.

[Kimmy_Gibbler]

@adaher

This can all get complicated, but risk assessment is a normal business practice for lenders. The government would probably be crappy at it, but a few simple rules would substantially reduce taxpayer risk compared to now.

For example, no loans for puppetry degrees. We had the absurdity of an Occupy protester complaining that his student loan should be forgiven because he couldn’t find a job in puppetry when he left school.

We should also stop student loans for law degrees temporary until the market for lawyers tightens. Right now, law students have very little chance of ever paying off their law school loans due to the glut of lawyers.

This doesn’t mean destroying kids’ dreams either, it’s actually helping them. An advisor could say, “I know you like puppetry, but have you considered computer science?”

Let me guess: Because you’re such a fervent capitalist and abhor central economic planning!

Except that voluntary lenders and voluntary borrowers should still have convince you, neither a borrower nor lender being, that their financing plans are sound

[adaher]

If I’m the lender, and I am, then yes, the borrower should have to meet standards and pay an interest rate commensurate with the risk I’m taking as a taxpayer.

[Honesty]

@ReticulatingSplines

What is your silly obsession with academic credentials? Seriously, you missed the whole point of college if you can’t think for yourself.

It’s not about thinking for yourself, it’s about whether you know the facts pertinent to the situation. Based on her vita, I believe Sen. Warren has a better understanding of bankruptcy law, consumer finance, and education than you. Notwithstanding this, if you do have greater expertise than Sen. Warren on these issues, then prove it. But until then, I’m going to trust her than you. Nothing persona.

@ReticulatingSplines

For the record, I have met Sen. Warren and I like her and respect her. I think she is very intelligent and I admire her commitment to consumer protection. But that doesn’t mean this bill is a good one, because it’s not.

That’s all well and good,** ReticulatingSplines**, but I’m curious as to why you haven’t addressed her remarks. Following this paragraph, I’ve provided a full rundown of her speech - by hand. I think you along with some others have had a field day on my comments but none of you have actually addressed her speech. Please, please, please point out specifically where she is wrong, and why is she wrong.

@Sen. Warren (D-MA)

Mr. President, on July 1st, the interest rate on new, federally subsidized student loans is set to double from 3.4 to 6.8 percent. That means unless Congress acts, for millions of young people the cost of borrowing money to go to college will double.

The student debt problem in this country is quiet growing crisis. Today’s graduates collectively carry more than $1 trillion in debt - more than all than outstanding credit card debt in the whole country. Doubling the interest rate on new student loans will just increase the pressure on our young people.

Keep in mind: These students didn’t go to the mall and run up charges on a credit card. They worked hard, they stayed in class, they learned new skills, and they borrowed what they needed to pay for their education. Their education will improve their opportunities in life, but their education won’t help just these students. When they acquire more skills, these students help us build a strong an competitive economy and strengthen our middle class.

Federal Reserve discount window at a rate of 0.75%. But this summer a student who is trying to get a loan to go to college will pay 7%. In other words, the federal government is going to charge students interest rates that are nine times higher the rates for the biggest banks - the same banks that destroyed millions jobs and nearly broke the economy.

That isn’t right. And that is why I’m introducing legislation to give students the same deal we give the big banks.

The Bank on Student Loan Fairness Act would allow students who are eligible federally subsidized Stafford loans to borrow at the same rate the big banks get through the Federal Reserve discount window. For one year, the Federal Reserve would make funds available to the Department of Education to make loans to students at the same low rate offered to the big banks. This will give students relief from high interest rates while giving Congress time to find a long-term solution.

Some may say that we can’t afford this proposal. I would remind them that the federal government currently make 36 cents in profit on every dollar in lends to students. Add up all of the profits and you’ll find that students will bring in about $34 billion next year.

Meanwhile, big banks pay interest that is one-ninth the rate the students will pay.

That is wrong. It doesn’t reflect our values. We shouldn’t be profiting from our students who are drowning in debt while we’re giving great deals to big banks. We should be investing in our young people so they can get good jobs and grow this economy, so let’s give them same great deal the banks get.

Some explain that we give banks exceptionally low interest rate because the economy is still shaky and banks need access to cheap credit to continue the recovery.

But our students are just as important as banks to a strong recovery. And the debt they carry also poses a serious risk to that recovery. In fact, in March of this year, the Federal Reserve said that, because of the economic impact on family budgets, high levels of student debt pose a risk to our shaky economic recovery.

If the Federal Reserve can float trillions of dollars to large financial institutions at low interest rates to grow the economy, surely they can float the Department of Education the money to fund our students, keep us competitive, and grow our middle class.

Let’s face it: Big banks get a great deal when they borrow money from the Fed. In effect, the American taxpayer is investing in those banks. We should make the same kind of investment to our young people who are trying to get an education. Lend them the money and make them pay it back, but give our kids a break on interest they pay. Let’s Banks on Students.

The Bank on Students Loan Fairness Act is my first standalone bill in the United States Senate. I’m introducing this bill because our students are facing a crisis. We cannot stand by a simply watch. This is about our students, our economy, and our values. The Bank of Student Loan Fairness Act is a first step toward helping young people who are drowning in debt.

Unlike the big banks, students don’t have armies of lobbyist and lawyers. They have only their voices. And they call on us to do what is right.

Thank you.

@ReticulatingSplines

1. How banks borrow at a certain rate in some dire situations and so all students must also be allowed to borrow at the same rate JUST BECAUSE, and
2. How the bill must be great and I am wrong because she taught at prestigious schools.

Like I said before, I trust Sen. Warren on this topic more than you. Education means something, although I assume you likely disagree with that.

@ReticulatingSplines

Please. Just answer the question. Why must student loan rates equal discount window rates? The discount window is virtually risk-free for the Fed. That’s why interest is so low. Student loan rates are high because they default at high rates and someone has to pay to service the loans. Should they be lower than 6.8%? Perhaps. But why 75 bps? It’s totally arbitrary and is nothing more than populist"fuck the banks" propaganda that you’re buying hook, line, and sinker.

These are the times I’m convinced I live in a bubble. Do you know what the word populist means? It literally means supporting the rights of the people. What is wrong with this? Every Senator should be a populist to their constituents. I think you labeling her as a “populist” is a dull ploy to diminish her position, just like people have been decrying Obama as a “Socialist”.

As to your question, see above in Sen. Warren remarks. I would only add that by tethering the discount rate to the student rate it would ensure that students get the best possible rate on loans for federal money. The point isn’t to provide free money to students but to at least guarantee that student loans will be low.

• Honesty

[adaher]

The taxpayers are the people. Should not their interests come first?

Warren is making a pretty simple error in her speech. She’s assuming that all college students are a good investment. That’s true of some majors, but not others. Some schools, but not others. The government needs to perform better risk assessment. Failing that, the government needs to charge high enough interest to insure that the taxpayers do not take huge losses.

[Honesty]

@adaher

The taxpayers are the people. Should not their interests come first?

Warren is making a pretty simple error in her speech. She’s assuming that all college students are a good investment. That’s true of some majors, but not others. Some schools, but not others. The government needs to perform better risk assessment. Failing that, the government needs to charge high enough interest to insure that the taxpayers do not take huge losses.

While I support the government offering extra incentives for students to major in STEM fields, I don’t think the government ought to be picking winners and losers for majors. That’s a personal decision regardless of supposed saturation of American citizens who are now seeking degrees in puppetry.

• Honesty

[ReticulatingSplines]

@Honesty

snip

It’s cute how you portray this as a partisan attack. But face it, other liberals hate the plan too. Why don’t you look up the curricula vitae of the folks at the Brookings Institution who called ita “cheap political gimmick” and “embarrassingly bad”?

@Honesty

She didn’t just go to Harvard, she’s been a professor and publishing papers since the 1980’s. Again, where’s your vita, Sir?

Oh yeah, and if you’d bothered to, you know, read, you’d see that Warren never attended Harvard at all. Not that I think that makes her any less intelligent, but you maybe should read stuff more carefully.

[adaher]

@Honesty

While I support the government offering extra incentives for students to major in STEM fields, I don’t think the government ought to be picking winners and losers for majors. That’s a personal decision regardless of supposed saturation of American citizens who are now seeking degrees in puppetry.

• Honesty

It’s not just puppetry. Given the rise in college costs, only some majors provide a reasonable opportunity to actually pay the money back.

We do students no favors by getting them into debt they can never pay back.

It’s not as if the average earnings for particular majors can’t be found on the internet. How much a student can borrow should be based on these figures in the same way how much house you can afford is based on how much you earn. In this case, we’d take average expected future earnings and a formula to determine how much a student in that major could borrow.

[John_Mace]

Here’s her educational background, from wikipedia:

There she enrolled in the University of Houston and was graduated in 1970 with a degree in speech pathology and audiology.[9] For a year, she taught children with disabilities in a public school, based on an “emergency certificate,” as she had not taken the education courses required for a regular teaching certificate.[10][11]

Warren and her husband moved to New Jersey for his work where, after becoming pregnant with their first child, she decided to become a stay-at-home mom .[12][13] After her daughter turned two, Warren enrolled at the Rutgers School of Law–Newark.[12] She worked as a summer associate at Cadwalader, Wickersham & Taft. Shortly before her graduation in 1976, Warren became pregnant with her second child, and began to work as a lawyer from home, writing wills and doing real estate closings.[8][12]

Warren attended The George Washington University and the University of Houston. She received a Juris Doctor from Rutgers School of Law–Newark in 1976, and went on to teach law at several universities before joining Harvard in the early 1990s.

Not seeing anything about finance or economics there.

[smiling_bandit]

@Honesty

Because we live in a world where doing back-breaking labor doesn’t pay much. I don’t mean to be a grammar nazi nor to personally attack you, but I think it’s ironic that you decry the benefits of college when your post is riddled with misspellings.

I think it’s ironic you proclaim the benefits of college while failing even the most minimal test of logical thinking. I think it’s quite consistent of you to focus narrowly on appearances and ignore substance. You also fail to note that tradesmen don’t usually do back-breaking labor, as they’re highly skilled workers who are, in fact, much in demand even now.

Also, I make no claim to be able to type very well, particularly when I’m in a hurry or have to type on my phone. There’s a difference between education, and typing. Deal with it.

Your grandparents would not last very well in present world, then. How can you sign an on-line application for a job if you don’t know how to type, how to use a mouse, or use a computer. Sorry to break it to you, but laborers went out of style in the 1990’s and employers want people with college degrees.

First off, it’s extremely presumptive of you to assume my grandparents didn’t use computers. It’s even more arrogant to assume they couldn’t use a computer, even if they ha grown up with them as everyone does today. It’s also highly inaccurate to believe that colleges do most computer-skills training. It’s also exceedingly insulting for you to dismiss them as laborers, when they were skilled, experienced men who ran businesses or major manufacturing facilities.

[KarlGrenze]

@adaher

It’s not as if the average earnings for particular majors can’t be found on the internet. How much a student can borrow should be based on these figures in the same way how much house you can afford is based on how much you earn. In this case, we’d take average expected future earnings and a formula to determine how much a student in that major could borrow.

Except these things go up or down depending on the economy. It is very likely that you can tell “Hm, based on the last x years, major A has provided a ROI, so we will subsidize student loans for those that take major A as opposed to major B.” But 4-6 years down the road, the starting salary and career prospects of major A have decreased. What then?

[Honesty]

@ReticulatingSplines

Oh yeah, and if you’d bothered to, you know, read, you’d see that Warren never attended Harvard at all. Not that I think that makes her any less intelligent, but you maybe should read stuff more carefully.

What is this? She’s been a professor at Harvard for over a decade which, frankly, has more gravitas than getting one’s undergraduate degree from the institution.

@John_Mace

Not seeing anything about finance or economics there.

John Mace, that’s because you’re not looking in the right place. Please see her peer-reviewed papers on these very topics here, here, here, here, here, and here. She has *also *published 7 books on the topic of bankruptcy and finance but I didn’t include them since they are not peer-reviewed, however, I would be more than happy to post links to those books on Amazon.By any measuring stick, Sen. Warren knows what she is talking about. Where are your peer reviews papers on this topic? What classes have you taught on this topic? What Congressional committees have you sat in front of? How many books have you published on finance and bankruptcy? How many federal agencies have you devised and submitted for review? Generally speaking, I don’t how you guys hate on a woman who is smarter than you and quantitatively more knowledgeable than you on this topic. It’s mind-boggling.

@ReticulatingSplines

It’s cute how you portray this as a partisan attack. But face it, other liberals hate the plan too. Why don’t you look up the curricula vitae of the folks at the Brookings Institution who called it a “cheap political gimmick” and “embarrassingly bad”? .

Well, why don’t you address what she’s said. Explain exactly where in her speech she has it wrong. I’m not looking up the vita of the people at the Brookings Institution, however, I will certainly will look at the vita if you provide them, but I know you won’t, so it’s moot point.

• Honesty

[smiling_bandit]

Appeal to Authority

[CJJ]

@Debaser

It’s not complicated. This fool had a safe, high paying job as a teacher that he walked away from to go to puppet school for three years. When he came back his job was gone. That’s his choice, and it was a foolish one by any measure.

Then as your own cite points out he goes to Occupy every day and whines about how the sub position was the only job he could find.

If he was worried about having a job he should have kept the one he already had. If he wanted to improve his job prospects he should have gotten a marketable degree.

That you would defend this idiot is mind blowing.

That you would call this guy an “idiot” says more about your world-view than his choices, along with your characterization of his attendance at Occupy as “whining”, your blithe dismissal of his career choice as “puppet school”, and the rationalization that he should have just kept the job he had. It also ignores the fact that–per the other cites–this fellow did find a way (via the Occupy protests) to “market” his degree and improve not just his job prospects but his life in general.

That I find none of this “mind-blowing” shows my familiarity with the usual clap-trap of right-wing argument: hasty generalization based on scant facts that are bent and twisted to support a world view, larded with plenty of snide commentary to reinforce it. Kinda the opposite of “fighting ignorance”, but also kinda what I expect when I run into right-wing BS; I didn’t know anything about this guy until I saw adahar’s throwaway comment, so I took 20 minutes Googling him and came up with the facts. Try it some time, you may be amazed what you can learn.

No, you’re quite confused if you believe that Steve Jobs’ advice is fairly interpreted as urging someone to quit a full-time job to gain mastery of puppeteering.

Try again. Jobs dropped out of college in his first year (a comparable economic choice to quitting on a secure job), and as he says in the exact speech I cited:

Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

Notice here that Jobs mentions a lot of things you have to trust in to make that leap, and nowhere there do I see “marketability”. I wonder if the usual right-wingers here even knew this about Jobs–as I said above, a little reading and exploration fights a lot of ignorance.