5 ms·

student loans are corporate welfare for the banks: the government pays the interest while one is in school, and will pay off the loan if the student defaults.

student loans are corporate welfare for the banks: the government pays the interest while one is in school, and will pay off the loan if the student defaults. It's crippling not just to the student but to the entire nation's economy that they're left with all that debt after leaving school - not after graduation, but after leaving school for any reason. We would all be a lot better off were students given outright grants that they were not required to pay back.

adventured 11y ago
The radical majority of profit in the scheme goes to the US Government, not banks. It's government welfare, for the government, in fact. "Government books $41.3 billion in student loan profits" [1] That's the equivalent of the combined profit of JP Morgan and Wells Fargo for their entire businesses. The student loan racket is a huge slush fund for the Federal Government. They loan money that costs them nothing, courtesy of the Fed, and they generate a massive profit off of it. [1] http://www.usatoday.com/story/news/nation/2013/11/25/federal-student-loan-profit/3696009/ http://www.usatoday.com/story/news/nation/2013/11/25/federal...
melling 11y ago
It's certainly an option but someone has to pay for it. The "government" is the tax payer. We could just do away with student loans all together. They've probably contributed to the cost of education far outpacing inflation. College prices would probably drop. It's amazing that a great program that has helped millions of people, myself included, has turned into this "horrible" program that people hate.
- mason240 11y ago
  >We could just do away with student loans all together. College prices would probably drop. The issue that causing tuition to rise - the injection of "free" money - would still be there and would actually be worse because students would be even further removed from any kind of cost/benefit analysis of the school.
  - maxerickson 11y ago
    Where is the free money coming from if you keep charging tuition but do away with student loans?
    - mason240 11y ago
      From the government that would be paying the tuition.
  - MichaelCrawford 11y ago
    In California specifically, I'd like to see a ballot proposition which would set the UC Regents salary to one dollar per year. Presently they can set their own salary; the governor and the legislature have no say, nor do the students. So they lead lavish lifestyles at the expense of students who are doing pretty good to live under highway overpasses.
    - deleted 11y ago
      [deleted]

adventured 11y ago

The radical majority of profit in the scheme goes to the US Government, not banks. It's government welfare, for the government, in fact. "Government books $41.3 billion in student loan profits" [1] That's the equivalent of the combined profit of JP Morgan and Wells Fargo for their entire businesses. The student loan racket is a huge slush fund for the Federal Government. They loan money that costs them nothing, courtesy of the Fed, and they generate a massive profit off of it. [1] http://www.usatoday.com/story/news/nation/2013/11/25/federal-student-loan-profit/3696009/ http://www.usatoday.com/story/news/nation/2013/11/25/federal...

melling 11y ago

It's certainly an option but someone has to pay for it. The "government" is the tax payer. We could just do away with student loans all together. They've probably contributed to the cost of education far outpacing inflation. College prices would probably drop. It's amazing that a great program that has helped millions of people, myself included, has turned into this "horrible" program that people hate.

mason240 11y ago
>We could just do away with student loans all together. College prices would probably drop. The issue that causing tuition to rise - the injection of "free" money - would still be there and would actually be worse because students would be even further removed from any kind of cost/benefit analysis of the school.
- maxerickson 11y ago
  Where is the free money coming from if you keep charging tuition but do away with student loans?
  - mason240 11y ago
    From the government that would be paying the tuition.
- MichaelCrawford 11y ago
  In California specifically, I'd like to see a ballot proposition which would set the UC Regents salary to one dollar per year. Presently they can set their own salary; the governor and the legislature have no say, nor do the students. So they lead lavish lifestyles at the expense of students who are doing pretty good to live under highway overpasses.
  - deleted 11y ago
    [deleted]