4 ms·

Who is eating this loss? Government? Individual tax payers? Someone or some entity must be losing this $7.7 billion.

by zkar 10y ago

beeboop 10y ago
Federal student loans are guaranteed by federal government. So the federal government is losing the $7.7 billion.
- jazzyk 10y ago
  Which means us, the taxpayers.
  - sp332 10y ago
    But do we, the voters, think it's worth it? I think it is, personally. Of course it would be nice to move toward cheaper education, but I'm OK with this forgiveness of debt.
sremani 10y ago
Sallie Mae or US Treasury - I am sure the banks would be made whole again. I am of mixed views here, because a Student Loan is technically is a permanent burden unlike other loans.
mikekij 10y ago
Well, since the federal government appears to be making a sizable profit off of their student loan business, I'd say that this $7.7B will just come off their "balance sheet". http://www.politifact.com/wisconsin/statements/2015/oct/01/elizabeth-warren/uncle-sam-track-make-66-billion-profit-6-years-stu/ http://www.politifact.com/wisconsin/statements/2015/oct/01/e...
mywittyname 10y ago
A federal law was passed in 2010 that required all student to originate from the DoE, giving them a monopoly on the juicy, high interest, high balance, zero risk loans given out to millions of Americans each year. Because of this, the DoE rakes in billions a year in profits from student loan interest. So this $7.7 could hit their bottom line and barely move it. http://www.bloomberg.com/news/articles/2015-12-11/a-144-000-student-default-shows-who-profits-at-taxpayer-expense http://www.bloomberg.com/news/articles/2015-12-11/a-144-000-... It's possible that this was the first step in a plan to gradually unwind the student loan crisis. I'm sure that changing the repayment rules while commercial lenders owned most of the student loan debt would cause a massive backlash.

4 ms·

Who is eating this loss? Government? Individual tax payers? Someone or some entity must be losing this $7.7 billion.

by zkar 10y ago

Who is eating this loss? Government? Individual tax payers? Someone or some entity must be losing this $7.7 billion.

beeboop 10y ago
Federal student loans are guaranteed by federal government. So the federal government is losing the $7.7 billion.
- jazzyk 10y ago
  Which means us, the taxpayers.
  - sp332 10y ago
    But do we, the voters, think it's worth it? I think it is, personally. Of course it would be nice to move toward cheaper education, but I'm OK with this forgiveness of debt.
sremani 10y ago
Sallie Mae or US Treasury - I am sure the banks would be made whole again. I am of mixed views here, because a Student Loan is technically is a permanent burden unlike other loans.
mikekij 10y ago
Well, since the federal government appears to be making a sizable profit off of their student loan business, I'd say that this $7.7B will just come off their "balance sheet". http://www.politifact.com/wisconsin/statements/2015/oct/01/elizabeth-warren/uncle-sam-track-make-66-billion-profit-6-years-stu/ http://www.politifact.com/wisconsin/statements/2015/oct/01/e...
mywittyname 10y ago
A federal law was passed in 2010 that required all student to originate from the DoE, giving them a monopoly on the juicy, high interest, high balance, zero risk loans given out to millions of Americans each year. Because of this, the DoE rakes in billions a year in profits from student loan interest. So this $7.7 could hit their bottom line and barely move it. http://www.bloomberg.com/news/articles/2015-12-11/a-144-000-student-default-shows-who-profits-at-taxpayer-expense http://www.bloomberg.com/news/articles/2015-12-11/a-144-000-... It's possible that this was the first step in a plan to gradually unwind the student loan crisis. I'm sure that changing the repayment rules while commercial lenders owned most of the student loan debt would cause a massive backlash.