Government Controlled Student Loans Confirm: Nothing is Free

Written by Pauline Wolak on June 19, 2013

In case any of you still thinks the government has your back, consider this.  In 2010, President Obama cut out the middle man.  While you can still get private loans, there is now only one lender offering guaranteed student loans.  That’s right, students, the government.  Even then there was no secret about where the money was going to go.  A 2010 article from the San Francisco Gate,

The government estimates it will save $61 billion over 10 years because it has a lower cost of funds than the banks it is replacing and won’t have to pay them a subsidy. Some of that money will go toward Pell grants for needy students, community colleges and minority-serving colleges. The rest will go to other uses including deficit reduction and health care reform.

What that article failed to mention was the inevitable interest rate increases.  Last year Congress stopped it.  But only for one year.  This year is different.  It’s not an election year.  Maybe instead of seeking an end to corporate influence, the Occupy movement could seek an end to election year influence.

Given the current job market, graduating students are going to find themselves deeply in debt with no way out.  Student loans are incredibly difficult to get out of via bankruptcy (and it SHOULD be that way).  Couple that with the government’s ability to find you and garnish your wages, throw liens on your property, and seize any assets you might have; let’s just say they could give the Mafia a run for their money.

Roughly 60% of the 18-29 age bracket voted to re-elect Obama in 2012.  Is this what you voted for?  Did you really buy into that whole “fair share” thing without considering that you would also be expected to pay the piper?
Remember kids, nothing is free.

Links:
http://thehill.com/opinion/columnists/dick-morris/302247-loans-subsidize-obamacare

http://www.sfgate.com/business/networth/article/Feds-take-over-student-loan-program-from-banks-3193888.php

http://chronicle.com/article/Defying-Expectations-Half-of/135620/

http://www.reuters.com/article/2013/06/06/us-usa-studentloans-senate-idUSBRE95514V20130606

http://www.usatoday.com/story/news/2013/06/16/us-government-projected-to-make-record-50b-in-student-loan-profit/2427443/

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Pauline is a proud wife and mother of three. When she isn't being the world's greatest Girl Friday, she is volunteers her time as a school librarian and athletic director. Pauline enjoys football, politics, good beer, and arguing with anyone. She's a devout pro-life Catholic. Pauline believes in the 1st Amendment and uses it on a daily basis, most notably to ambush unsuspecting family members in political debate! You can find her work here at Clash and at redknucklepolitics.com. Follow her on twitter at @MiStateFan.