During a question-and-answer session with students at Kansas State University, sophomore Tiffany Cooper asked [PRESIDENT BUSH], "Recently, $12.7 billion was cut from education, and I was just wondering, you know, how is that supposed to help our futures?"
"The education budget was cut?" Bush responded. "Say it again. What was cut? At the federal level?"
She repeated the question and clarified that she was referring to student loans.
"Actually," Bush finally said, "I think what we did was reform the student-loan program.
"We're not cutting money out of it. In other words, people aren't going to be cut off the program. We're just making sure it works better."...
"Students and their parents will be paying their loans back at higher-than-market rates so that the government can pay for tax cuts for the very rich," said Luke Swarthout of the State Public Interest Research Groups' Higher Education Project.
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3 comments:
The law clearly explains what the reasons for deferment and forebearance are. I had no problem getting a deferment on my loan while I was in graduate school - in fact, since the interest is not charged during the deferment, the principal did not grow, and I repaid the 1995 loan in 2000 dollars.
While long-term unemployment and other disasters happen, I would wonder what percentage of borrowers actually had their student loan principal grow significantly, and exactly how that happened. I would speculate that for most students, these loans are still the most advantageous deal. An emerging monopoly in student lending is a cause for concern, though.
Somehow, the previous comment was applied to the wrong posting - I meant it for the "Empire Built on Lateness one."
You need to find another expert to quote. Even with a fixed rate of 6.8 percent, student loans will still be a very good deal. They will not have "higher-than-market rates" and it's irresponsible to say so. For someone with no regular income, collateral or credit history, student loans will still be a great deal. Compare 6.8 percent with rates on private loans, bank lines of credit or credit cards, and you will see what I mean.
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