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Thune Helps Nix Warren Student Loan Refinancing Plan, Flogs ACA

Senator John Thune had a chance to help university graduates and stimulate the economy yesterday. He had a chance to vote for Senator Elizabeth Warren's plan to refinance millions of student loans at lower rates. Democratic Senate candidate Rick Weiland likes Warren's plan; so should the 25 million loan holders who could each save about $2,000 on interest and instead spend that money on real economy-boosting stuff (and those working folks would spend that money much more reliably than the rich bankers hoarding their interest).

Predictably, Senator Thune voted against Senator Warren's plan, joining his Republican colleagues in making sure that her plan fell four votes short of the 60 needed to move it forward in the Senate yesterday. Senator Warren paid for her plan with a tax increase on the rich, and in Senator Thune's anti-Vulcan logic, the needs of the comfy few outweigh the needs of the struggling many.

Senator Thune has put up a smokescreen to hide his anti-student vote. Earlier this week he floated a bill to let employers give pre-tax dollars to help employees refinance student loans with private lenders. Note the private lenders: we can't rouse Senator Thune and the GOP to help regular working folks if we can't also wedge the door open for more privatization.

Then yesterday, Senator Thune found a way to spin student financial woes into an Affordable Care Act issue, proposing a bill to exempt schools from the ACA employer mandate. Senator Thune contends that providing health insurance to employees takes money away from instructional budgets in the K-12 system and in colleges and universities. It's nice to see a Republican acknowledge that throwing more money at classrooms really does make education work better. However, Senator Thune is just taking another potshot at ObamaCare. In picking his ACA school exemption over Warren's student loan plan, Senator Thune is also showing that helping students by pinching the rich a little is unacceptable, while pretending to promote education by making it harder for school employees to get decent health insurance is just fine.

Thune's vote against Warren and his continued ObamaCare posturing are two more reasons we can't afford to send Mike Rounds to back up Thune's GOP foolishness in Washington. We have to wait until 2016 to replace Thune, but we can send a humane, sensible Democrat in 2014 to check Thune's assault on students and workers.


  1. 96 Tears 2014.06.12

    College students are profit centers, according to Senator Thune. He's always had the luxury of government paychecks to make sure his cute daughters would never have to struggle paying their own college education or to get great careers. He doesn't give a crap about regular folks and their kids. It's also why he is Obstructionist in Chief of health care reform in the United States of America. Thune, who's never had to work hard in his life, is the beneficiary of a lifetime of government payrolls and is incapable of realizing what normal South Dakotans go through to pay their bills and keep up. Completely out of touch!

  2. Chris S. 2014.06.12

    I can't help but notice the 60-vote threshold mentioned in the piece. Republicans are now filibustering student loan legislation? Good grief, supermajorities used to be required for extremely important things like international treaties. Now it's routine for the minority party to block every single thing, even student loan reform. (And note, dear mainstream media, that "both sides" aren't responsible.)

  3. larry kurtz 2014.06.12

    Thune reacting to the anti-Koch agenda? I'm shocked!

  4. larry kurtz 2014.06.12

    Thune paid his school loans off by helping his donors poison every waterway in South Dakota.

  5. owen reitzel 2014.06.12

    Larry, I bet that Thune's school loans were a hell of a lot less than $25,000

  6. larry kurtz 2014.06.12

    Ebola College: where christians become infected.

  7. Kevin Weiland 2014.06.12

    As a physician, I care for a lot of post graduate early 20 "something's" with Insulin Dependent Diabetes. If it wasn't for the ACA, they would be on their own in purchasing their health care, but most were denied health care because of a pre-existing condition. They are back in our clinics, getting the medication and monitoring they need so they don't end up with the end organ damage (kidney, brain, heart) of Type 1 Diabetes. Many are productive college grads with huge debt. They have jobs but still live at home with Mom and Dad. Can you imagine their life without the ACA? It would even be better with the Warren plan. Agreed, Cory, South Dakota can not afford to send another politician the likes of John Thune to Washington. (Disclaimer....yes, Rick Weiland is my brother)

  8. Wayne B. 2014.06.12

    Our resources and efforts would be better spent controlling the cost of post-secondary education, rather than nibbling at the edges of interest rates.

    Maybe the best way to do that is to end the law that makes it nigh impossible to discharge student loan debt in bankruptcy court, and simultaneously get the government out of the loan business (stick to Pell grants and the like). Combine that with efforts to get students to do better career planning in high school so they know if college is right for them, and so they have a plan with a 4 year exit strategy.

    And maybe teaching a little more real "home economics" like budgeting, fiscal discipline, etc. so that we don't have kids blowing student loan money on beer and pizza.

  9. Jenny 2014.06.12

    And how much lobbyist money has Thune gotten from big banks? Why else would he have voted against lower student loan interest rates? Beats me.

  10. Jenny 2014.06.12

    Hopefully this vote will come back to haunt Thune. This was just a ver conservative refinaning bill to help students with student loan debt. Why anyone vote against a simple refinancing bill for student loans is beyond me. What's funny is that these republicans preach family values. I guess billions in welfare checks to oil companies and wealthy farmers are the values they're talking about.

  11. Jenny 2014.06.12

    very conservative measure (I meant)

  12. Steve Sibson 2014.06.12

    "What's funny is that these republicans preach family values."

    Yes, like, for example, it is a sin to covet your rich neighbors wealth, or pass the debt used to finance your hedonism on to future generations.

  13. Jenny 2014.06.12

    You telling me that Joe Mauer is worth 23 million a year at just a .267 batting avg, Sib?

  14. lesliengland 2014.06.12

    hedonism, eugenics, crony capitalists oh my.

  15. Steve Sibson 2014.06.12

    He is not worth 23 million even if his batting average was .997. But I am not expecting him to pay for my healthcare costs, student loans, or anything else I want.

  16. larry kurtz 2014.06.12

    Beisbol de Estados unidos es muy loco.

  17. Jenny 2014.06.12

    Don't you think banks have profited enough this last decade, Sibby? We bailed them out after they stole most of the middle class savings and profited off of ignorant people buying houses they couldn't afford. Come on, students deserve a fair interest rate. The price of college is outrageous today.

  18. Wayne B. 2014.06.12

    No, Jenny - students do not deserve low interest rates. Low credit is reserved for folks who are good credit risks. How many 18-year olds would you trust with $25,000 of your money?

    They DO deserve an opportunity to seek an education they can afford without having to borrow for it. The fact that the Board of Regents has allowed prices to increase every year, building palatial new campuses and dorms with big screen TVs everywhere, running 24/7 is criminal. If we went back to basics - plain dorms, plain rooms, minimal administration and a focus on high quality professors, we'd get a lot leaner education system that produces better outcomes.

    Refinancing to a lower interest rate is putting a bandaid on an aortic tear. I know a guy who languished for 8 years in college without a plan, and is working at a call center for $13 a year, $100k in debt because he didn't have a clue what he was going to do.

    You can't just show up at college and expect a job in 4 years. It doesn't work that way.

  19. Jerry 2014.06.12

    Congratulations Deb on your state of Minnesota achieving 95% of your citizens insured thanks to the ACA Obamacare. Very impressive and now we can see why South Dakota just keeps loosing out in the recruiting end for jobs and employers.

  20. Douglas Wiken 2014.06.12

    Even students who work their butts off, don't waste money on junk and junk food, can end up with burdensome loans. This is a refinance option that allows older loans to be refinanced at lower interest rates. These options exist for cars, houses, consumer credit, etc. Why not for responsible students trying to make a contribution to society and get their loans paid off. High interest rates just make it harder to pay off loans. I have never quite understood lender logic in jacking up interest rates on higher risk loans. High interest rates almost guarantee default.

  21. Ken Santema 2014.06.12

    From what I hear there are a few Dem Senators not happy with Warren taking a stand with this bill. Since the bill would be unconstitutional (new taxes must originate in the House) it would leave some Dem Senators up for re-election in an awkward position this fall if they vote again for a bill that doesn't follow basic constitutional guidelines.

  22. Roger Elgersma 2014.06.12

    capitalism is supposed to be efficient. The money made my the banks refinancing feew would be greater than the taxes saved by employers who donate money. Not efficient, but then Thune's idea came from government.

  23. Anne Beal 2014.06.12

    Too many young people borrow too much money to go to colleges they can't afford, and get educations which don't equip them with marketable skills. Nobody holds a gun to their heads and forces them to take out those loans. But how do you feel about people who buy cars or houses they can't afford or max out their credit cards? Why all the sympathy for people who get themselves into that sort of difficulty?
    Think about this one: the person who worked two jobs while going to a Vo-tech, never went to a single frat party or football game, and lived on Ramen noodles for 4 years, is now the rich person you think should be subsidizing some kid's education at Yale? I don't get it.
    . My own opinion is that adults should go to college, but children should not be sent. People should grow up before they go to college, and part of being an adult is making good financial decisions. Don't borrow money if you have no plan for paying it back.

  24. John 2014.06.12

    Owen, good find. KELO is not a news organization; they sell ads and read press releases.
    Wayne, good point, yet a higher education is a public investment and a private endeavor. Four colleges ought be that; pending extraordinary circumstances (single parent, etc.). Single, healthy students not caring for kids, siblings, infirm parents, etc., have no excuse and should pay dearly for their wasting our public resources. College presidents should be held accountable and their institutions heavily penalized for each able student taking longer than 4 years to earn a 4 year degree. There are too many presidents, department heads, and professors lacking discipline and focus. Yes, this applies to you, too, SDSMT.

  25. owen reitzel 2014.06.12

    But Anne should we be in the business of telling what professions they can go into and which ones they can't? Doesn't sound like a free country to me.
    How many students wanted to become teachers but were talked out of it because the pay in South Dakota is low?
    How about we work on education cheaper for these kids so there isn't so much debt.

  26. Wayne B. 2014.06.12

    Owen, nobody would be telling what professions (majors) they could or could not choose. Anyone is free to do that. But to borrow money to pursue underwater basketweaving without a plan to create a revenue stream capable of supporting said individual? No thank you. Why should you and I the taxpayer be asked to cough up to subsidize someone's Gilligan's Island adventure at any university?

    A liberal arts education is not for everyone. We shouldn't try to fit people into that mold if they don't belong. The job of our primary education system should be to prepare our youth for the world. Any post-secondary education should be carefully designed to ensure they can be well-integrated into a functioning society. Said functioning society is undeniably linked to the economy. We do our young adults a disservice to pigeon hole them into a 4 year liberal arts college when they would excel at a 2 year technical school.

    Crazy factoid: In New York a person who goes into hair styling school right out of highschool will have more lifetime earning power than a primary care physician because they have a marketable skill with low debt and a head start on earning.

  27. owen reitzel 2014.06.12

    Wayne, by telling people what professions that they can get loans for and what ones they can't you're doing the same thing.
    We shouldn't pigeon hole anybody, I agree. But if that person wants to go into a field that doesn't pay the best who are we to say no?
    My son got his masters degree in history. it took over a year for him to find a job in his field. He knew it would be difficult to find a job, but he did.
    My question to you Wayne is should my son have been forced to be a welder because welders are in demand? For me the answer is no. He went into history because he loved it. He took out student loans and he's still paying them back.
    Should we discourge people from becoming welders? Of course not, if thats what they want to do.

  28. Donald Pay 2014.06.12

    I'd turn this decision a bit. Why do we have state institutions of higher education? Are they just to provide wage slaves for industries that pay executives a high enough salary that those executives can donate large sums to the Republican Party?

    Taxpayers fund all these liberal arts courses and majors at state universities that some folks think are not producing suitably trained wage slaves. If you folks don't want philosophy or English majors, then you need to immediately seek to defund those departments in your state's universities. Not willing to do that? Then STFU!!!

    Student borrowing for higher education is something that became prevalent as state legislatures decreased their funding of higher education over four decades, and as Congress cut grants in favor of subsidized loans. It got worse when a lot of the education loans got partially privatized. Essentially, it is the abandonment of higher education by government that is putting more and more pressure on middle class families and young adults.

    Warren's bill was a minimal first step, and Thunytoons could even do that. If we really want to do some good, we would make undergraduate education free. We could do that by taxing the money that trickles up from the wage slaves to the ultra rich executives. Oh, wait. Then there wouldn't be any cut for the political class. Sorry.

  29. owen reitzel 2014.06.12

    Donald you make sense

  30. Wayne B. 2014.06.12


    If someone wants to BORROW money, and someone is willing to lend them that money, fine. But right now our government is subsidizing that, and it shouldn't be.

    The entire reason we had a housing crisis is because people without means bought homes they couldn't afford, backed by the guarantee of our federal government.

    People who are poor credit risks should not be buying homes.

    Nor should people without a plan be taking on tens of thousands of dollars in debt to pursue an education.

    Owen, nobody can force your son to be a welder. He's free to pursue a Masters in History. But if he can't get one through grants, scholarships, and the sweat of his brow, should our government really be involved in how your son gets the rest of the finances to earn his education? Is it really in our society's best interest to finance the pursuits of someone seeking an education in a field with a surplus of labor at the expense of those fields with shortages?

    Governance is the allocation of scarce resources. It is illogical to allocate those scarce resources on surpluses when they should be used to address pressing deficiencies.

  31. mhs 2014.06.13

    Boys and girls, here's a quick lesson in the fixed income markets. Banks do not hold student loans. They only originate them. The funding source for student loans are bonds sold to private investors, the vast majority of which are pension funds, 401k administrators, etc.: those investing the money for working people like you and I that are saving for retirement.

    The bonds hold clauses that guarantee the rate you bought it at remains in place for a certain period of years. This bill overturned those guarantees and lets the government take your investment away from you, so you lose money. It's the same as the government telling you the 4% mortgage on your house is now going to be 8%: you lose.

    This bill wasn't about banks vs. students. It was about one group of citizens vs. another. You know who really loses under this bill:

    The elderly.

    Retired people favor safer bond investments vs. stocks, so they take the biggest hit of this forced refinance. They already have been crushed this decade by the Federal Reserve pushing the interest rates they live on down to near zero. Anybody hear your dad or grandpa complain about CD rates lately? If you are comfortable allowing old folks to pay for your cheaper loan, this is the bill for you.

    Best to understand the consequences of legislation before condeming a vote, wouldn't you all think?

  32. Donald Pay 2014.06.13

    mhs does what the wealthy ruling elite always tries to do: pit various parts of the middle class against each other. There are all sorts of investment strategies that provide security. The elderly, and I am fast becoming one of them, don't need to gouge young adults just starting out in life in order to obtain security. There is plenty of wealth held by the 1% that needs to be put to use in a constructive way.

  33. owen reitzel 2014.06.13

    So Wayne, if you have the money you can be what you want but if you're poor you have to do what you're told to do?
    In my opinion we invest in young people so they can go to school, find a great job and be a productive member of society and grow our society.
    As I said before we have to find a way to lower costs so the debt isn't so high.

  34. Steve Sibson 2014.06.13

    With the VA scandal and now this issue, when will we learn that the government is not the solution? Those who run the government are not going to just had over their wealth every time someone wants to covet. Sad that people agree to a loan, and when it comes time to pay it off, they expect their rich neighbor to do it instead.

  35. Jerry 2014.06.13

    The government is the solution Mr. Sibson, always has been since the founders envisioned it. You cannot solve major problems at county or state levels, big problems need big government to make it work. You seem to want a large military until it gets wounded or sick and then you kick it in the teeth like a typical republican. The scandal at the VA is lack of funding and resources caused by the republican party, they and you own it.

    I am sure that when you were a perfect young man, you never took out a student loan. All these folks are asking is to refinance it like you did with your mortgage, why are you so special?

  36. Steve Sibson 2014.06.13

    Jerry, the last time I checked Obama was in the White House. I also understand that he was allotted $12 billion to deal with this issue. The problem is that bigger is not always better, and the VA is one of many proofs. Our big government is too big to succeed in fixing problems.

    Yes, I did take out a student loan and I paid it off without coveting. And no, they are not just asking to refinance. They are asking their rich neighbors to bear the cost of that refinancing. The Neo-Fascists are not letting the Neo-Marxists go that far.

  37. Jerry 2014.06.13

    Yes, Mr. Sibson, President Bush was in the White House when this first started to be critical. Remember Walter Reed Hospital, don't you and the findings after that leaked out? There has been a relaxation of the requirements to be in the VA system since President Obama was elected and we have added a few hundred thousand veterans into the system with those billions you mention. Veterans who deserve treatments I might add. In addition to the newly added old veterans, we now have an additional 2 million more from Iraq and Afghanistan and other veterans of the war areas since 2001.

    Your political party, the republicans, filibustered request after request for more funding and more facilities for the VA that are desperately needed. Just the other day, Bernie Saunders and John McCain co-sponsored that same bill again and it passed with 3 dissenters, all republican and will now go to the House.

    Your party also filibustered the request for the refinancing of student loans. This was not a gimme to the students, it was a business deal that would have allowed them to get lower interest rates on their current loans. You know, just like we have done with mortgages. What is the difference? Face it Mr. Sibson, the republican party or tea party or koch party is only for the rich. The rest can go pound sand. We are onto you though, finally.

  38. Steve Sibson 2014.06.13

    "What is the difference?"

    Jerry, the difference is the Warner Act was going to force a tax on the rich so the financial institutions will get their cut. So much for only republicans being crony capitalists for corporations. Both political parties got skin in that game. Sad that only a few of us is onto it. But you can't claim that I never warned you.

  39. Craig 2014.06.13

    Wayne: "Maybe the best way to do that is to end the law that makes it nigh impossible to discharge student loan debt in bankruptcy court, and simultaneously get the government out of the loan business (stick to Pell grants and the like). "

    First off, the government owns in excess of 80% of student loan debt, thus if you discharge a chunk of that debt via bankruptcy it results in increased costs being passed on to the taxpayer. Since a degree isn't like a car or a home that can be repossessed or foreclosed upon, there is an incentive for some to rack up $100k in student loans before filing bankruptcy two weeks after graduation. That hardly seems like a solution to the problem of skyrocketing tuition costs since the schools still collect their money, and the holder of the note (i.e. the government) is the one left with the sea of red where the balance sheet was supposed to be.

    Now if you want government out of the student loan business, that leaves two possible outcomes. Number one, the private industry picks up the slack, but historically speaking private loans are nowhere near as affordable, and unlike federal loans, private loans are not given based upon a need basis but rather given based upon the ability to repay. This leaves a large percentage of our population unable to obtain such loans, and thus unable to pursue higher education. The end result is a greater divide between the haves and the have-nots... in equality is never a good thing no matter what some in DC like to suggest.

    Your other option is for the government to simply dump billions more into the grant programs and/or develop some form of service for school program. That would of course offer almost anyone the opportuity to go to school, but most people aren't a fan of more 'free' money being given away, and the idea of asking people to serve the nation in exchange for education prompts "big government" fears.

    Is this really the answer?

    Truth is, the rates some of the federal student loans are originated at are somewhat obscene when you think about the rate that the treasury gives on the money it loans to banks. The feds shouldn't profit from student loans, and interest rates should be adjusted to ensure the program is revenue neutral. One can easily argue that many of the students who rely upon student loans to finance their education will be the leaders of tomorrow who will better our world, and if we make obtaining an education harder it will only harm us in the end.

    Yes there are students who shouldn't be in college and yes there are degrees that don't prepare people for a 'real' job in our economy... but that is life. We have choices and some people make the wrong ones. So what - in the scope of things for every horror story someone tells me about a student with $80k in student loans who is working in a call center I'd show you five or ten students who graduated and found good paying jobs in their chosen fields that allow them enough income to make their loan payments without any serious trouble. The truth is, if that wasn't the case you wouldn't see banks offer private student loans - because banks aren't in the business of loaning money to people who they don't feel can pay it back.

    Warren's bill wasn't perfect, but it was a move in the right direction. It isn't as if she was suggesting we forgive much of the debt, and for ever dollar those borrowers aren't sending to Washington would be a dollar them might be spending locally. Ask yourselves where you think that dollar would have the most impact?

  40. Jerry 2014.06.13

    Excellent Craig. Your question at the end is spot on as well.

  41. Nick Nemec 2014.06.13

    Student loans should be a direct loan from the Federal government. Running them through lenders with special rules to insure payment is just another hand out to the corporate capitalists. If the Feds ran the show the interest rates would be less because we could cut out the middleman and his guaranteed profits that just drive up costs to young people and help insure they start out adult life with a large load of debt.

  42. Steve Sibson 2014.06.13

    "It isn't as if she was suggesting we forgive much of the debt, and for ever dollar those borrowers aren't sending to Washington would be a dollar them might be spending locally. Ask yourselves where you think that dollar would have the most impact?"

    Like the bar or the the area drug dealer? The Warren bill replaced those dollars with an additional tax, which is not to originate in the Senate. The same amount of money goes to DC. The question is, should the one sending it be the one who agreed to the loan, or should that person be allowed to covet their rich neighbor's property?

  43. Steve Sibson 2014.06.13

    "just drive up costs to young people and help insure they start out adult life with a large load of debt"

    Nick, that is exactly what we are doing with the federal debt. Time to rein in a big government that is not able to solve problems. Neither Democratic nor Republican Establishments are willing to fix that because their special interest groups want a cut of that debt now.

  44. lesliengland 2014.06.13

    sib, beal, wb, mhs, (ks, re maybe?) can u back up any of this?

  45. Craig 2014.06.13

    Nick - the FFEL program you describe was elimiated in 2010. The current system of federal student loans is a direct loan system. The only third parties involved are companies contracted by the government to service the loans (send billing statements, answer customer service calls etc.) The private financial companies who used to originate the loans and act as a middleman are no longer part of the story, which is why you saw so many of them exit the student loan business several years ago.

    Steve: "Like the bar or the the area drug dealer? "

    Yes Steve, because all former college students have a desire to spend their discretionary income at local bars, and of course they all have at least one drug dealer on speed dial.

    Does everyone here NOT understand that you're a troll? Because I have yet to figure out why so may respond to your nonsense.

  46. lesliengland 2014.06.13

    troll, or repub plant?

  47. lesliengland 2014.06.13

    thune website-"As a result of the Affordable Care Act, the federal government completely absorbed the student loan industry and now charges students as much as 6.41 percent to obtain money to pay for tuition."

    not so fast Thune who has nothing but cushy political appointments or occasional job since his own college experience, steadfastly supporting hawks in two Iraq wars, Afghanistan, repub obstructionism, and deception of his constituents.

    usnews said:

    In many cases, this will save parents money because the direct federal PLUS rate is capped at 7.9 percent a year, while private lenders often charged as much as 8.5 percent.

    By eliminating taxpayer subsidies to corporate middlemen who marketed and originated federal student loans, the Obama administration says it will raise more than $60 billion over the next 10 years that will be spent on more and bigger grants, easier repayment terms, and even a little deficit reduction.

    The biggest immediate downside for students is that some won't get the small discounts that certain lenders offered on Stafford loans.

    ... some research shows that the federal government was more lenient on parents who had credit problems and less likely to reject parents' PLUS applications than private banks.

    ...that's a savings for students because it means there is no more incentive for the kind of kickback arrangements that led to recent scandals...if the federal government can make more loans with fewer people, that's an improvement in efficiency that saves taxpayers money....

  48. Steve Sibson 2014.06.13

    Sorry Craig, I don't intend to be a troll. I sincerely believe that most who covet end up spending money on the pleasures of life while they expect others to take care of the necessities.

  49. Nick Nemec 2014.06.13

    Craig, thanks for setting me straight. Can older loans be shifted to the current system? Can they get a interest rate write down?

  50. Douglas Wiken 2014.06.13

    "The entire reason we had a housing crisis is because people without means bought homes they couldn't afford, backed by the guarantee of our federal government."

    Nope, we had a financing crisis because regulations did not prevent pyramiding debt into multiple forms all unfortunately linked like a huge building of cards which if it crashed without government intervention would have shut down the stock market, bond market, bank system and economy tossing us into a world-wide depression.

    The repeal of Glass-Steagall act was the actual cause. Senators like Tim Johnson supported that. Clinton supported that. Big banks desiring to get into big bond markets wanted that. We all paid for that with a combination of taxes and inflation. Unfortunately, those most responsible and benefiting the most and sucking up more on more of the common people's wealth which they so dearly covet and believe is intrinsically theirs have not paid a fair share of picking up the damage costs resulting from their greed and intellectual corruption.

  51. Steve Sibson 2014.06.13

    Nick, the way I understand this (Craig, please correct me if I am wrong) is that to refinance a loan, you need to obtain a new loan in order to pay off the old one. If you are no longer a student, then you can't get a new student loan (at the lower rate) to pay off the old one. Now if the Warner bill was only about allowing that, then I don't believe the GOP would have had a problem. But the Warner bill was to add a tax to cover the lost in revenue from dropping to a lower rate. The Democrats are now making is sound like the GOP are opposed to refinancing student loans, when in fact the GOP were against using tax increases to do so.

  52. Wayne B. 2014.06.13

    Owen: “So Wayne, if you have the money you can be what you want but if you're poor you have to do what you're told to do?”

    Owen, if I have the money, I can buy a Ferrari. If I don’t, I’m “forced” to settle for something within my means. If I have the means, I can get a McMansion. If I don’t, I’m relegated to mortgaging something else, or renting. At least with education, scholarships and grants can help the truly deserving/needy pursue their dreams.

    Owen: “In my opinion we invest in young people so they can go to school, find a great job and be a productive member of society and grow our society.”

    The formula “go to highschool” + “go to college” = “get a great job” doesn’t actually work unless the individual takes a very proactive role in their education. I’ve taught at the college level and very few took responsibility for their own learning; they wanted it spoon fed to them. They wanted their exams to be easy. They didn’t want to think for themselves. College isn't for everyone, and what a horrible way to find out it isn't for you while going $25,000 in debt.

    Owen: “As I said before we have to find a way to lower costs so the debt isn't so high.”

    I wholeheartedly agree with you! I think higher education is worth the public investment. I disagree vehemently with the way our public funds have been squandered on fancy updates and bloated administration (I’ve been at the business office at a University employing 11 people, all of whom were playing Solitaire on their computers and couldn't be bothered to help me with payroll issues).

    I even think squishy, non-easily-marketable classes are worthwhile at a liberal arts school. I took several philosophy courses while also pursuing two majors.

    Craig, you have valid points. The most valid, I think, is the fact that unlike mortgages and auto loans, an education cannot be seized in bankruptcy court. It has value, but is an intangible.

    Maybe the solution is just not to allow loans for education, period. If we, the "greatest nation in the world", cannot afford to collectively make technical schools and public universities affordable for our young adults working at or close to minimum wage to put themselves through college on a pay-as-you-go method, then something is fundamentally wrong.

    If only the top 10% could afford to go to college without loans, there would be a revolt. Maybe that's what you need.

    This deferred cost system we have now with college costs raising 5 - 10% above inflation every year is unsustainable. It's going to take radical change to make it so my children can afford schooling, even with the resources my wife & I will be able to reserve for aid.

  53. Steve Sibson 2014.06.13

    Douglas, I agree with your analysis, but you also need to add the government-backed component as a cause for bankers not to care if the loans are paid back. If not, the government picks up the tab.

  54. Douglas Wiken 2014.06.13

    Steve, you are venturing into the moral hazard area which others with more knowledge than I discussed here. I am not at all sure the bank-bond connectors had any concept of the potential damage that system could produce or if they assumed the gov't would pick up their losses.

    "Too big to fail" is dangerous monopolization no matter what industry...banking, brokerage, insurance, telecommunications, internet services, whatever. There are all kinds of new "trusts" than need busting.

  55. Roger Cornelius 2014.06.13

    The good news here, if there is any, is that the Republican Party has added to their War on Women, War on minority voting rights, War on Food Stamps, to now include a War on Students.

  56. Craig 2014.06.13

    Nick: "Can older loans be shifted to the current system? Can they get a interest rate write down?"

    I can't give you a direct answer other than to say it depends. There is such a thing as a consolidation loan where you basically pay off the old loan(s) with a new one, but in most cases the interest rate would be similar to the old so the benefits are suspect.

    In most cases borrowers with old loans won't have many options to refinance - and that is precisely what the Warren bill was trying to address. Unfortunately, her bill attempted to offset the costs of refinancing by enacting the so-called Buffett rule, which would require those earning seven figures or more a year to pay a minimum tax rate of 30%. That may seem confusing since the top rate is currently 35%, but due to tax loopholes and shelters, most upper income earners pay far-far less than 35%. Thus the Warren bill was merely inserting language that said anyone who earned seven figures would need to pay a minimum of 30%... thus eliminating many of hte loopholes and shelters that cost our treasury billions each year.

    The funny thing is, during much of Reagan's Presidency (1982-1986), the top marginal tax rate was 50% and we are continually told he was the posterchild for Republican tax policy... so why are Republicans balking at a measly 30% rate?

    The real problem here is student loan debt can act like economic handcuffs to a borrower for decades. Slashing their interest rate frees up funds that can (and will) be used elsewhere. Imagine all of that money being used to purchase homes, automobiles, furniture, clothing, and many of the other goods and services our nation produces - and this impact is compounded each and every year over the life of the loans. Would that have a greater economic impact than someone making $20MM a year having to pay a 30% fixed income tax vs. the effective rate of ~18% they may pay today? Truth is - those with lower incomes tend to spend a much greater portion of their incomes vs those at the upper income brackets, and our economy doesn't grow based upon a stock portfolio... it grows based upon people buying things.

    At least we know which group of taxpayers each side of the aisle thinks are more important (as if we didn't already know).

  57. barry freed 2014.06.15

    USD and SDSU are both building new 60 million dollar stadiums for which each student will pay 20%, or $600 plus on top of the Student Activities Fees already in place. Not that long ago, $600 would have covered tuition and books for a semester. Over the life of a Student Loan, how much interest will that $600 add to their debt for something that has nothing to do with getting a job or becoming a deeper thinker?
    $125 million for two gymnasiums, zero for the $1.25 million Medicaid Expansion because...
    "We're broke!" Yeah, mentally and spiritually.

  58. Lynn 2014.06.15

    With increasing tuition I see what I feel is too much of an emphasis in college athletics with going up in NCAA divisions and all the costs included for recruitment, staff and facilities rather than a focus on education and it being affordable.

    I was told by an old friend who has a background in college athletics that those sports specifically football are money makers for the school not only supporting unprofitable sports like cross country but help to financially support the school with sponsorship. Is that true?

    When I think of college and a focus on education and sports are their for the added collegiate experience I think of Carlton College, St. Olaf, College of St. Benedict/St. Johns or even a public college U of Minn Morris all of which are in Minnesota.

  59. Douglas Wiken 2014.06.15

    Barry Freed hits a really sore point. Even the existing althletic fees can add thousands to total debt. Students should not be required to pay athletic fees. Such fees should be voluntary. I suspect that love for jocks and jockery have been greatly exaggerated and making support of them would likely demonstrate that.

  60. mike from iowa 2014.06.15

    No offense,but some high schools in Texas spend 60 million on high school football stadiums. Perspective,perspective. Down South football IS their main religion. It is everything to just about every little town in Texas of a Friday night. I don't believe they even incorporate "pass or don't play" academic standards.

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