Obama SOCIALIZED student loans ~ now uses FASCISM to collect them!

[Melensdad]

Just to be very clear, the government take over of the student loan program is pure socialism. Obama engineered it. Its fact that cannot be denied.

Now, in typical authoritarian style Fascism, he is using government directed and regulated private collection agencies to play the bad guy and collect the loans using strongarm tactics that could not be accomplished without total government backing.

So, just to make sure I understand it, Obama made 'easy credit' loans to people who were bad risks, now he is raking them over the coals to get the money back and allowing generous commissions to be reaped from the collection process by his private army of thugs. Those bad risk people are the same folks he talks to in his campaign speeches about making college affordable to everyone . . . even those people too stupid to graduate. The private army he employs apparently has more collection powers than most collection agencies, which, by law, must back off under specific circumstances. But because this is government money, the collectors get special nearly police powers to harass people and destroy their lives.

http://www.bloomberg.com/news/2012-...llectors-profiting-from-student-loan-woe.html

The debt collector on the other end of the phone gave Oswaldo Campos an ultimatum:
Pay $219 a month toward his more than $20,000 in defaulted student loans, or Pioneer Credit Recovery, a contractor with the U.S. Education Department, would confiscate his pay. Campos, disabled from liver disease, makes about $20,000 a year.

A debt collector for the U.S. Education Department insisted that Oswaldo Campos pay $219 a month on his more than $20,000 in student loans -- even though he was entitled to pay less under federal student-loan rules.

Campos holds a letter from the U.S. Department of Education confirming that he is considered disabled. He contracted liver disease from a blood transfusion.

“We’re not playing here,” Campos recalled the collector telling him in December. “You’re dealing with the federal government. You have no other options.”

Campos agreed to have the money deducted each month from his bank account, even though federal student-loan rules would let him pay less and become eligible for a plan -- approved by Congress and touted by President Barack Obama -- requiring him to lay out about $50 a month. To satisfy Pioneer, Campos borrowed from friends, cut meat from his diet and stopped buying gas to drive his 82-year-old mother to doctor’s visits for her Parkinson’s Disease.

With $67 billion of student loans in default, the Education Department is turning to an army of private debt-collection companies to put the squeeze on borrowers. Working on commissions that totaled about $1 billion last year, these government contractors face growing complaints that they are violating federal laws by insisting on stiff payments, even when borrowers’ incomes make them eligible for leniency. . .

What is Fascism? LINKY => http://www.econlib.org/library/Enc/Fascism.html

 

[jimbo]

From what I have read, the collection fee, which is generally around 30%, on top of the interest is deducted from the payment and the balance is then applied to the principle and interest. Thus, a loan with a balance of $10,000 will require near 15 K to repay once it goes to a collection agency.

I'm not sure how these fees compare to private loan fees. The student loans should never have been made to those with no hope of paying them back.

On the other hand, all this could be avoided if you work with the government before the loan goes to a credit agency.

 

[300 H and H]

jimbo,

Exactly, they should have gone to the Government, and this wouldn't be happening to them. It was a loan and needs to be repaid. So many of these loans were taken out with no intention of paying them back. Many think that the Government backed the loan, so let them pay it back. WRONG... Time for these students to get an education.....on how the world of loans and repayment really works.....

I paid mine off early. I remember some one saying that they were going to convert their loan to a "grant" funny thing is, they had no rightfull way of doing this. Some how I bet that guy is still paying on his....As he should.

Regards, Kirk

 

[Melensdad]

. . . . all this could be avoided if you work with the government before the loan goes to a credit agency.

jimbo,

Exactly, they should have gone to the Government, and this wouldn't be happening to them. . .

OR, maybe the Government should NOT be in the LOAN business and maybe the Government should NOT be in the COLLECTION business.

Think about this.

Why is the government giving out loans to everyone and anyone AND WHAT IS THE EFFECT? There is a strong trail of evidence that for as long as the government has been trying to make college "affordable" the prices have been INCREASING. It used to be that you could "work your way" through school as a waiter or bartender. Now private college tuitions are in the range of $40,000 a year for selective schools and room & board is another $15,000 and you still have books to pay for after that. Public schools are relatively cheaper but still very expensive, largely because the schools are now competing for kids by building fancier dorms, fancier athletic facilities, fancier lounge areas, etc.

Further, if you have the government lending the money it will rarely allow a default or partial default . . . as is evidenced here. If a private lender made the loan then 2 things would have happened. First, loans would have been a bit more selective. Second, loans going into default may have been in a better position to be re-negotiated to reduce interest.

But with the GOVERNMENT controlling all of this there is no hope. We all lose.

 

[jimbo]

OR, maybe the Government should NOT be in the LOAN business and maybe the Government should NOT be in the COLLECTION business.

Think about this.

Why is the government giving out loans to everyone and anyone AND WHAT IS THE EFFECT? There is a strong trail of evidence that for as long as the government has been trying to make college "affordable" the prices have been INCREASING. It used to be that you could "work your way" through school as a waiter or bartender. Now private college tuitions are in the range of $40,000 a year for selective schools and room & board is another $15,000 and you still have books to pay for after that. Public schools are relatively cheaper but still very expensive, largely because the schools are now competing for kids by building fancier dorms, fancier athletic facilities, fancier lounge areas, etc.

Further, if you have the government lending the money it will rarely allow a default or partial default . . . as is evidenced here. If a private lender made the loan then 2 things would have happened. First, loans would have been a bit more selective. Second, loans going into default may have been in a better position to be re-negotiated to reduce interest.

But with the GOVERNMENT controlling all of this there is no hope. We all lose.

I agree. Any government loan program is doomed to fail as they are designed to loan money to those who could not otherwise qualify. And you are right, higher education will use whatever money is available to them.

What I was talking about is what you should do if you find yourself in default. Any collection agency is going to tack their high fees to the cost of the loan.

Government needs to stay out of private business. I can think of no incident where their intervention gained anything other than votes and payoffs to cronies.

 

[CityGirl]

From Obama's speech April 24, 2009

Right now, there are two main kinds of federal loans. First, there are Direct Loans. These are loans where tax dollars go directly to help students pay for tuition, not to pad the profits of private lenders. The other kinds of loans are Federal Family Education Loans. These loans, known as FFEL loans, make up the majority of all college loans. Under the FFEL program, lenders get a big government subsidy with every loan they make. And these loans are then guaranteed with taxpayer money, which means that if a student defaults, a lender can get back almost all of its money from our government.

And there's only one real difference between Direct Loans and private FFEL loans. It's that under the FFEL program, taxpayers are paying banks a premium to act as middlemen -- a premium that costs the American people billions of dollars each year. Well, that's a premium we cannot afford -- not when we could be reinvesting that same money in our students, in our economy, and in our country.

And that's why I've called for ending the FFEL program and shifting entirely over to Direct Loans. It's a step that even a conservative estimate predicts will save tens of billions of tax dollars over the next ten years. According to the Congressional Budget Office, the money we could save by cutting out the middleman would pay for 95 percent of our plan to guarantee growing Pell Grants. This would help ensure that every American, everywhere in this country, can out-compete any worker, anywhere in the world.

 

[squerly]

Are they going to collect the Solindra loans too?

 

[AAUTOFAB1]

Oswaldo Campos will probably vote for the big "O" even after all is said and done.

 

[Melensdad]

Are they going to collect the Solindra loans too?

Ha, you a funny guy

But the real problem is we need to get the government out of ALL the student loans and ALL the collections of those loans!

 

[300 H and H]

Melensdad,

I quote,
Why is the government giving out loans to everyone and anyone AND WHAT IS THE EFFECT? There is a strong trail of evidence that for as long as the government has been trying to make college "affordable" the prices have been INCREASING.

Excellent point, and this one really needs addressed. High tuition rates, and professor saleries. They have no skin in the game, and they get paid how much? hell back 30 years ago they were making more than the students of the day thought was right. They own nothing, and every thing is provided to them. They make too damn much for what they do, especially when they have grad students doing their work for them. I think we need to take a hard look at how tutition money is being spent, and how costs can be cut. There is also strong eveidence that the education we are paying for isn't going to land a job, in fact it may very well be the employer may have to re educate the grad before they are of much use.

Botttom line, a diploma doen't carry the weight it used to if every tom dick and harry has one. I feel this idea that every one needs a colledge edducation is flat wrong. Unless of course, you are connected to the university system, in witch case you may disagree....

Regards, Kirk

 

[JEV]

I feel this idea that every one needs a colledge edducation is flat wrong. Unless of course, you are connected to the university system, in witch case you may disagree....

Regards, Kirk

It appears that a college degree requirement for a job has replaced the high school diploma requirement of yesteryear. Without a graduate degree you are relegated to entry level jobs unless you have a degree in the hard sciences. I know a couple of young college grads from church with liberal arts degrees (I call them degrees in "uselessology") who could not get jobs to pay back their loans, so they started cutting lawns to put money in their pockets and keep up with bills. This went from lawn maintenance to other residential outdoor projects like patios and power washing decks and houses, and today they have a thriving business that they never expected to be in, and their loans have been fully repaid.

I think a lot of the dregs who are not repaying their loans are just the children of Obama voters who expect the gubmit to care for them from the cradle to the grave. IMHO, there is ALWAYS a way to make a living and pay your bills for the average Joe, even if it may not be your targeted profession. Unless you have a mental disability that prevents you from learning, everyone can be trained to something new...except for maybe the welfare rats who have had learning bred out of them.

 

[Melensdad]

It appears that a college degree requirement for a job has replaced the high school diploma requirement of yesteryear. Without a graduate degree you are relegated to entry level jobs unless you have a degree in the hard sciences. . .

The assessment you made is based the fact that the 'value' of a college degree has dropped. It used to be only the 'smart' kids when to college. Now we shove everyone into college and that means that the 'smart' kids have to go on to graduate school to get an advanced degree. Further, we push so many kids into college who study unemployable courses like "woman's studies" and "humanities" or "anthropology" and those kids have no chance of getting career type jobs. They are skilled enough to work the cash register at Starbucks or Kroger but not skilled enough to compete in real life. So we have devalued college.

Further, we should be pushing kids (who show an interest in trades) into programs that teach plumbing, to become a welder, an electrician, a machinist, a farmer or a mechanic. We have people who want to build factories but we don't have enough machinists, welders, etc to run the factories.

Instead we are doing to college what we did to the housing market. We are creating a bubble that will burst. The politicians are pushing COLLEGE COLLEGE COLLEGE and the schools are now competing for kids by offering more than educations. They are offering nicer housing (suites with maid service). They are offering better food (campus restaurants instead of dining halls). They are offering nicer campuses. They have upped their game to attract the BEST students and the costs are skyrocketing.

So now the BEST schools take the BEST students and offer the MOST luxuries and are charging the highest prices. The next level down of school is also making things nicer, even state schools now offer dining options that we could only have dreamed of with white linens on the tables! So even state schools are up in price.

The more we PUSH kids into college the worse this "bubble" will be and the more the costs will go up, while the VALUE WILL GO DOWN.

And we are already seeing signs the bubble is bursting because now we need to have these fascist (private owned/state controlled) collection agencies chasing down kids who can't get jobs because they got worthless degrees.

 

[JEV]

My middle daughter lives in Florida and worked her way through college while working for Disney and Starbucks. It took her 6 years to get a degree in humanities (uselessology), hoping to get a good paying position with Disney, but that never happened. Thanks to her sister and brother-in-law, she got an interview with a major Insurance company that they both work for, and she was able sell the company on her strengths (strong work ethic and a 4.0 GPA her entire college career) to get a job in medical claims (bottom of the barrel job), but is now working in the legal department and is making a nice salary. Her loans are fully paid and she is working on her MBA, paying cash as she goes along.

All of the public high schools around here have disbanded their Industrial Arts programs, and converted the spaces to computer labs. If a student wants to learn a trade, they have to be bussed to Auburn Career Center to take classes, then return to their respective high school for the remaining required classes for graduation. The high schools only want to teach college prep, and IMO, have marginalized the hands-on students by shipping them offsite to learn their chosen career paths. I taught Construction Practices at Auburn for 2 years, and was amazed at how hungry these kids were to learn. I actually hired one of my student for a summer as a carpenter's helper, and today he has his own remodeling business. It's just a shame they could not do it in their local high school environment with their friends, and have to be bussed 15-20 miles for some of the students at the outer reaches of the county.

 

[Melensdad]

. . . The high schools only want to teach college prep. . . .

Thanks to Ted Kennedy and the "NO CHILD LEFT BEHIND" law that he wrote (and Bush signed) the schools effectively are forced to teach college preparation courses.

 

[jimbo]

What the higher education system needs is more Berea's. A Kentucky (I think) college. No tuition, only academic standards get you in. Everybody works a minimum of 10 hours a week.

http://www.berea.edu/about/

 

[Melensdad]

What the higher education system needs is more Berea's. A Kentucky (I think) college. No tuition, only academic standards get you in. Everybody works a minimum of 10 hours a week.

http://www.berea.edu/about/

The problem with that school, as good as it sounds, is that it has a graduation rate of only 50%.

Could it be that people don't appreciate what they get for free?

Or could it be that other factors prevent them from graduating?

Honestly I have no clue, but if only 50% graduate that tends to indicate some problem.

 

[jimbo]

The problem with that school, as good as it sounds, is that it has a graduation rate of only 50%.

Could it be that people don't appreciate what they get for free?

Or could it be that other factors prevent them from graduating?

Honestly I have no clue, but if only 50% graduate that tends to indicate some problem.

You bring up an interesting point, and I, like you, do not have an answer. I doubt that the fact that is free has much of an influence, although I do not consider working 10 hours/week free. That is the way many got through college in my day. Could be the student base they draw from, mostly "disadvantaged" kids, or perhaps many find it harder than they expected, or possibly the fact that it is a Christian school. Possibly the school is not willing to compromise on their standards. I don't know. What I do know, is that the school has a reputation of producing productive members of society in fields ranging from crafts to CEO's.

Personally, I would rather see funding go to programs similar to this, and the dropouts can sweep the graduates floors and clean the toilets of those who do graduate.

All society can do it put the opportunity in front of a person, and that is all that it should do. What they do with it is their business, and their loss or gain. We should be looking at the 50% who succeed, not the 50% that fail.

 

[JTyler]

This is quite interesting. Can you link me to the site you got the quote from (if it is from a website)?

I may decide to write an article on this.

Thanks.

 

[Melensdad]

This is quite interesting. Can you link me to the site you got the quote from (if it is from a website)?

I may decide to write an article on this.

Thanks.

http://www.bloomberg.com/news/2012-...llectors-profiting-from-student-loan-woe.html