Wednesday, May 15, 2013

Government to charge students 9 times more to borrow money than it charges banks

Massachusetts Sen. Elizabeth Warren says it isn't right that Congress is letting interest rates for student loans double to 6.8 percent. Meanwhile, the banks that crashed the economy and caused untold suffering get to borrow money from the government at 0.75 percent. 

Robert Scheer says it's astonishing that there's a senator who actually cares enough to tell the public about the corporate takeover of government.

Scheer explains in truthdig:

Congress is about to let the interest rate charged for new student loans double to 6.8 percent at a time when the too-big-to-fail banks that caused the Great Recession continue to be bailed out at the rate of 0.75 percent. Yes, the banks pay less than 1 percent for money that we the taxpayers lend them. I know that such statistics are thought to be boring, but as Warren explained, the rate that students will have to pay “is nine times higher than the rate at which the government loans money to the big banks.” 
The student loan interest rate that had been temporarily cut in half back in 2007 was once again set to double, but instead of pushing for the status quo as Congress did last year, Warren has upped the ante with legislation that would cut the student loan rate way down to the near zero that the big banks enjoy. As Warren put it in her characteristically no bull style: 
“The federal government is profiting off loans to our young people while giving a far better deal to the same Wall Street banks that crashed our economy and destroyed millions of jobs. That’s why I’ve introduced the Bank on Students Loan Fairness Act as my first bill in the Senate: To allow students to borrow money at the same rate as the biggest banks. 
” … Why should the big banks get a nearly-free ride while people trying to get an education pay nine times more?” Warren asked. “It isn’t right.”
Here's what else isn't right: Tuition isn't affordable for many students but college presidents are living large. Alternet reports:
...public university presidents have seen much growth in their compensation packages over the years. The $600,000 to $700,000 compensation package range saw the highest growth, as it included 28 presidents in 2012 — up from 13 in 2011.
The median student loan debt in the U.S. is $13,600, with the average being $24,301. In total, the amount of student loan debt owed in the U.S. is $1 trillion. Funding for public universities has been cut by about 28 percent since 2008, while the cost of attending one has more than doubled since 1988.
The Chronicle of Higher Education lists compensation for university presidents. The highest paid is Graham Spanier, who was forced out at Penn State over his mishandling of the Jerry Sandusky child abuse scandal. Next comes Jay Gogue of Auburn University, who received $2.5 million, and E. Gordon Gee of Ohio State University $1.9 million. The New York Times reports Gee also gets“a rent-free mansion with an elevator, a pool and a tennis court and flights on private jets.”

It's enough to turn your stomach.