Elizabeth Warren: Student Loan Profits 'Morally Wrong'

[East Coast Pirate]

The Obama administration and Congress are not helping students, Sen. Elizabeth Warren (D-Mass.) charged Wednesday, reaping record profits off the federal student loan program that a regulator said has finally surpassed $1 trillion in overall debt.

The federal government is due to book $51 billion in profit this year off new and existing federal student loans, according to estimates by the nonpartisan Congressional Budget Office. The record amount brings the government’s profit haul to nearly $120 billion over the past five years, according to CBO forecasts and Department of Education budget documents. The CBO estimates that the government will generate $184 billion in profit for new loans made this fiscal year through 2023.

“Instead of helping our students, the government is making a profit on student loans,” Warren said of the profit figures during a conference filled with young people. “That is wrong. It is morally wrong. That is obscene.”

“The government should not be making profits off the backs of our students," she said. "Period.”

More: http://www.huffingtonpost.com/2013/07/17/elizabeth-warren-student-loan_n_3612384.html

[customerserviceguy]

1. So, why is government getting a return on money it borrows "immoral"?

I'd love to get a business loan with no experience, no collateral, and no business plan at student interest rates.

[geckosfeet]

2. Educating young people will presumably result in a better life for them,

and in a better educated populace for the country.

Bottle necking the process with a for profit "business model" will result in a better profits and higher ceo pay for a smallish segment of the economy.

I'd love to get a business loan with no experience, no collateral, and no business plan at student interest rates.

17 or 18 year old kids getting their first taste of the business world through "take it in kiester business practices" by their student loan providers - nice sentiment. Got to toughen them up for the real world right? Is that the thinking here? Or is it simply squeezing every last drop of blood out of a lucrative market?

It looks like vulture capitalism to me. I vote for low cost easily available college education. Fuck the banks and loan providers. They should be regulated and managed to provide for the public good - not public blood sucking.

[customerserviceguy]

5. If everyone who paid the higher education industry

got something that would indeed benefit their financial future, you'd have a really good point. I suppose that as recently as the 1970's, when I went to the university, that might have been true. But even then, after dropping out at the end of my sophomore year, I went to work at a place where I had as co-workers people with bachelor's degrees in economics and art history. You could well say that the money expended on those extra two years didn't give them any kind of leg up over me in a field that I spent most of the next twenty-five years doing.

Not all education leads to a favorable outcome for the student. It seems that the higher education industry is what is really benefitted by cheap, give-it-to-anybody student loan money.

[geckosfeet]

7. I agree as a practical matter, but disagree in principle.

Education is something that no one can take from you, and it benefits you in ways that you really cannot measure on a balance sheet.

I think putting money into the educational system is good for the economy and good for people. Making education another high priced commodity available only to the rich is where we were as a society in the 20's, 30's 40's and 50's.

[djean111]

3. Why is it a "business" loan?

Do you think having taxes pay for our current grade 1-12 educational system, which is slipping further behind other countries in the world (We're #25! We're #25!) is also bad? Should students and/or parents have to pay or borrow for that, too?
Investing in further education is investing in America. Other countries do that, why don't we do that?

[customerserviceguy]

6. Other countries

usually have a way to separate out those who will go on to expensive university educations, and those who will go into trade schools.

We just hand out grants and loans to anybody to pursue a whim, whether they're able to cut it or not, and whether there is a reasonable liklihood of a job when the training is completed.

I have no problem with K-12, and I have no problem with community colleges that provide vocational education in subjects that will lead to gainful employment. I do have a problem with diploma mills and gold-plated universities that have courses of study that lead to working for tips at Starbucks.

[East Coast Pirate]

4. Because you're not a student.

Saddling students with massive debt while our government gives billions of dollars of our money to the military industrial complex which funds their campaigns is morally wrong. We need educated Americans so we can compete with the rest of the world. But I don't expect a libertarian to understand that. Drown it in a bathtub, right?

[customerserviceguy]

8. I don't like military waste

any more than I like overspending on education to give people the false hope that they're going to be able to pay the loans that they're so very ready to sign on the dotted line for.

In any case, I don't see why government cannot make a fair return on money it borrows to let people wildly pursue their dreams.

[djean111]

9. Then concentrate your dislike on the banks that borrow from the government at 0% and pay almost

nothing for savings and charge usurious rates for loans. Or is that "good business".

[customerserviceguy]

10. I dislike them both

Why can't I be consistent on that? You know the bailout that happened under Junior has no chance of ever happening again, don't you? We're going to let poorly run banks fail in the future.

[djean111]

11. I wish I could believe that, I truly truly do.

But I don't.

[customerserviceguy]

12. It's the only thing I can think of

where both true progressives and the tea party agree.