This is really a one-two punch for student borrowers. Yesterday, $12 billion in cuts. Today, Sallie Mae's favorite congressman becomes the standard-bearer for the House.
See my quickie Voice commentary on same.
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If you bothered to actually examine the budget cuts, you would know that very little of the $11.9 billion in cuts is coming out of the students' hide. So with buddies like that, who needs enemies.
Under an old law (supported by the student groups, no less), the interest rate was going up to 6.8 percent anyway. If the rate had stayed variable, it would have increased this summer to 6.8 percent or higher, based on current market rates. So students may be better off with the new fixed rate.
You're being intellectualy dishonest, which is soooo Baby Boomer.
$20 billion in total cuts, $11.9 billion in net cuts. 70% of the total cuts come from students and parents. These cuts come from higher interest rates and by redirecting excessive subsidy paymens from lenders to students. New law/old law ignores the fact that this bill uses middle class families as revenue raisers to pay for tax cuts for the wealthy. That's the class angle-we're taking from middle class families with student loans to pay for tax cuts that predomenently wealthy individuals. Here's the generational angle: by not reinvesting the money in students, Congress misses the attempt to lower interest rates for students. That means students get the debt burden twice-once when they graduate, and once through the deficit.
Fact is that students are no worse off as a result of the new fixed rate –- fixed or variable, it will be around 6.8% -- and Congress's decision to eliminate what you call the "excessive" subsidy payments to lenders.
It's cynical and disingenous to try to make people think otherwise.
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