Meet the 37 Senators Who Voted for Millionaires Over Students

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This piece originally appeared on the Campaign for America’s Future blog.

The Capitol Rotunda looms over the statue of George Washington on Capitol Hill in Washington, Monday, Jan. 27, 2014, as the House and Senate resume work in Washington. President Barack Obama will deliver his State of the Union address Tuesday night to a joint session of Congress. (AP Photo/J. Scott Applewhite)
The Capitol Rotunda looms over the statue of George Washington on Capitol Hill in Washington. (AP Photo/J. Scott Applewhite)

Senate Republicans sided last week with 22,000 millionaires over 40 million Americans with student debt by blocking the Bank on Students Emergency Loan Refinancing Act.

The 56-38* vote fell shy of the 60 needed to prevent the bill, sponsored by Sen. Elizabeth Warren (D-MA), from being filibustered. The bill would have given existing student loan borrowers the chance to refinance their debt at today’s lower interest rates and would be fully paid for by enacting the “Buffet Rule,” which ensures billionaires and millionaires pay their fair share of taxes.

Refinancing student loans is common sense. Homeowners, businesses and even local governments are able to refinance their debts, yet graduates are being penalized for simply getting an education and a fighting chance at entering the middle class. There is no economic argument against the bill, either. Refinancing would help stimulate the economy by putting $62.9 billion back into the pockets of the millions struggling with student debt who need it the most.

“With this vote we show the American people who we work for in the United States Senate: billionaires or students,” said Warren. “A vote on this legislation is a vote to give millions of young people a fair shot at building their future.”

Warren is right: Time after time Republicans have shown they stand for Wall Street over Main Street. The only justification Republicans could offer for their vote to filibuster was that the bill was a Democratic ploy.

“The Senate Democrats’ bill isn’t really about students at all. It’s really all about Senate Democrats,” said Minority Leader Mitch McConnell (R-KY). “They want an issue to campaign on to save their own hides this November.”

The truth is this happens to affect Republicans and Democrats alike. Warren’s legislative remedy is supported by the majority of Americans, is economically advantageous and helps millions of struggling families.

Sen. McConnell continues to obstruct democracy in the name of special interests. And last week, these 37 senators joined him:

Lamar Alexander (TN)
Saxby Chambliss (GA)
John Cornyn (TX)
Michael Crapo (ID)
Michael Enzi (WY)
Charles Grassley (IA)
Orrin Hatch (UT)
James Inhofe (OK)
John McCain (AZ)
Mitch McConnell (KY)
Pat Roberts (KS)
Jefferson Sessions (AL)
Richard Shelby (AL)
Roy Blunt (MO)
John Boozman (AR)
Richard Burr (NC)
Jeff Flake (AZ)
John Isakson (GA)
Mark Kirk (IL)
Robert Portman (OH)
Patrick Toomey (PA)
David Vitter (LA)
Roger Wicker (MS)
John Thune (SD)
Thomas Coburn (OK)
Daniel Coats (IN)
Dean Heller (NV)
John Barrasso (WY)
Mike Johanns (NE)
James Risch (ID)
Marco Rubio (FL)
Rand Paul (KY)
John Hoeven (ND)
Mike Lee (UT)
Ron Johnson (WS)
Deb Fischer (NE)
Ted Cruz (TX)

In the end, only three Republican senators stood with Democrats and the 40 million Americans plagued with student loan debt: Susan Collins of Maine, Bob Corker of Tennessee and Lisa Murkowski of Alaska. They deserve special thanks for knowing the difference between right and wrong, not left vs. right.

Today’s vote was about students, workers, seniors and all those affected by a student debt crisis that doesn’t discriminate based on party affiliation.

Find out how much these senators just cost you by using the student loan refinance calculator.

*Note: Sen. Harry Reid (D-NV) voted “no” for procedural reasons: to make the motion to reconsider the vote, one must be on the prevailing side of a vote. And James Risch was originally erroneously labeled as representing Indiana. He actually represents Idaho. Thanks to the commenter who pointed this out.

Derek Pugh, Campaign for America's Future
Derek Pugh is a special assistant at the Campaign for America’s Future. His work focuses on a range of issues affecting economic growth and income inequality, including youth participation in the economy, the middle class, green energy, manufacturing and postsecondary education. Before joining the Campaign for America’s Future, Derek worked as a Roosevelt Policy Fellow at Young Invincibles.
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  • Grandma Moon

    How does this work? There was already a Senate vote, so where is the opportunity for a filibuster? And why not continue to pursue it in any case? Force the Republicans to get up and defend their position to deny relief to indebted students. Or else this is just another game.

  • Anonymous

    Isn’t it the “Buffett Rule”? Two Ts?

  • Anonymous

    James Risch is a Republican senator from Idaho, not Indiana. (Though yahoo, one of ours was still on that side.)

  • RowanM

    This was the vote for cloture. To simplify, I think the senate now has a special system to avoid filibusters where they do a pseudo-vote first, and if it doesn’t get 60 votes, then they won’t bring it up for a “real” vote.
    Anything that might get filibustered doesn’t come up to save time.

  • bruce schomisch

    REPUGLICANS,…Just Turned A Whole Bunch Of Students,…Against The G. O. P.,..The COLD HEARTED PARTY,….S A D,….

  • Marty Lee

    The South must be full of millionaires..

  • Anonymous

    And this is inaccurate reporting, because RowanM is correct. These people did not vote “against” the Warren sponsored bill – they voted against cloture which would have ended debate/discussion/filibustering. But yet people with agenda continue to make this into a vote on the students of America, which it was not. And if it was…then Senate majority leader Harry Reid (a democrat) voted “against” Warren’s bill as well. (he voted against cloture so he could bring it up again – a procedural technicality)

  • ForCry

    At first I thought wow! My dumb senator is NOT on this list??? Then I saw you abbreviated Wisconsin wrong (it’s WI, not WS) and there he is.

  • Jim

    This vote is no surprise to anyone. You might get it to pass if you didn’t include the part about the millionaires. Just try and see what happens.

  • Chris Kumpf

    $40 million Americans with six figure debt huh? So apparently the only people that take out student loans go to Harvard or Yale, or take 6 years to graduate from a state school? I would love someone to explain to me why people that made the decision to go to school and take on that debt should not be responsible to repay it. I would agree with you though on one point. Ask those senators that voted for the bill if they would agree to let student loan debt be discharged in bankruptcy. I bet the answer is a big fat no, because that would come out of their pockets….oh who am I kidding, they’d vote for it, because it’s not like you have to pay for it or anything.

  • Anonymous

    Lemme guess . . . if we took this list and placed it alongside the list of “most poorly educated states,” bingo! No California, Connecticut, Massachusetts, New York. We need exchange programs — people in Alabama need to see how nice it is to live in functioning communities where people are educated and the best job isn’t night manager at Walmart.

  • Anonymous

    I will bet, these are the same who voted against the veteran issues as well.

  • Guest

    James Risch is from Idaho, not Indiana.

  • John Stimson

    What happens when cloture is denied? The bill can’t be put up for a vote, so it can’t be passed. It has the same practical result as voting against the bill, except that if the bill were allowed to come up for a pass/no-pass vote, you would need more no votes to keep it from passing. This technique, the procedural filibuster, is being abused to change the effective requirement for passage of a bill from simple majority into a 60% super-majority. The story and headline do not seem inflammatory or dishonest at all.

  • RevPhil Manke

    Hi Kids, The ID for Wisconsin is WI, not WS. Wouldn’t want Sen Johnson to escape this.

  • RevPhil Manke

    What’s really sad here is that most people really believe they must vote D or R! They are “both” big money corporate minions for “0” reform. Look carefully at the Green Party. They have “credibility”.

  • mare

    I was wondering why Harry Reid voted no…thank you for enlightening us!

  • mare

    The entire republican platform is based on ignorance…which is also why they want to do away with the dept of education. The less the stupid people know, the better the Rebub chances of taking over. This is why the 2nd amendment is so important to them. The yahoos in the red states only care about their guns, and will vote for that reason only…as well as the anti-choice zealots…both camps are voting against their own interests and have no idea that they are playing into the hands of corporate America. They have no idea that their own state governments would rather see them sick and dying, then get the expanded medicare that their state could get into for FREE!!!! WAKE UP PEOPLE!!!! Hey, I’m from MA, we’ve had “Romneycare” (which is the state equivalent of “Obamacare”) for over a decade, and less than 2% of the population is uninsured. We’ve had “gay” marriage for over a decade and the state of marriage among the heterosexual population has not changed…in fact, it’s pretty awesome that our MA culture now includes words like “his husband” and “her wife”. THE SKY HAS NOT FALLEN!!! Ignorance MUST be met with strong resistance!

  • RowanM

    Also the story DOES note that Reid voted against the bill, AND that he did so for procedural reasons.

    But John is right. It is effectively the same thing because they said “This bill is not important enough to vote against filibustering” which is functionally the same as “I would let this bill get filibustered”.

    So basically it’s just letting them be cowards by hiding behind cloture rather than actually having to deal with the HASSLE of putting their mouth where their money is and having to work and talk through a filibuster.

  • Talk it out

    I heard about this. I didn’t understand this critique… what did this bill have to do with rich vs. poor? A: My understanding is to cover the costs of allowing students to refinance interest rates we would raise taxes on the rich. Thus, the article states 37 senators sided with rich over poor. After marrying into student debt, I’m quite familiar with gov’t interest rates. I found that the government has all kinds of consolidation and repayment plans, forbearance, and deferment in place for any income level. The direct loans peeps will spend hours on the phone with you (from experience) and the websites are very thorough explaining every option to keep payments low. The government bends over backwards to keep monthly payments low. It seems to me, for someone to get a loan at 6, 7 or even 8% (currently offering under 4%) with no credit history and no upfront fees, that’s pretty cheap money. NPR quoted Obama saying this bill would have saved the average student $2000 on the lifetime of the loan. If the student had the shortest repayment plan of just 10 years, you’re talking about saving less than $16 a month. Saving 2 hours of low wage work a month or a Starbucks’ drink a week. Why is this author so worked up over a bill that would accomplish so little?

  • Ather

    Don’t get it. I thought this people liked getting money. People can either buy products or pay off student loan debt. One or the other. Not both. Lowering the debt only makes people money. This makes the rich richer, if they own a business selling products.

  • Ather

    It’s not about how much or little the bill would accomplish. It’s that these people went against the majority, to help a minority who’s only complaint is: but we’d lose money. Even if the bill would only lower student debt by just one penny, the rich would still oppose it, and their slaves would still vote against it. And they’d oppose it because they’d lose money. Even if they’d only lose a penny. That will never happen, because then it would be “socialism” and “class warfare.”

  • Kevin Symanietz

    Sad how the Senate operated nowadays. Used to be that not every single proposal was filibustered. Now those days are gone.

  • Michael Patterson

    Bc filibuster reform never came to be, only for appointments I think. They meaning dems need to over come filibuster on filibuster reform, or do it 1st day of next congress when they only need 50…. it’s bs yes…. n just bc 37 vote no on cloture, doesn’t mean there are 60 votes plus for cloture, which is needed for up or down vote.

  • Jezzer

    No, they don’t.

  • Jezzer

    No, we’re full of ignorant people who vote against their best interests because the South skews social conservative, and the Republicans are very good at appealing to internalized racism, sexism, and homophobia. So the South keeps voting Republicans in because they’ll keep those uppity women and minorities in line, and the rich keep getting richer, and the poor stay poor.

  • Chris McElfresh

    Loan modification… Hm… I seem to remember something about this… It was… Oh, yeah! I remember those AWESOME home loan modifications and their little “boost” to our economy. Interest is there for a reason. Banks need to make money to lend money. The problem is not that student debt is too high, the problem is colleges charge exorbitant fees for… well… everything! There’s also that fact that every kid in high school, regardless of academic potential, is put under a lot of pressure to go to college. This whole “everybody needs to go to UCLA” attitude is one of the reasons we are where we are.

    Also, there is the factor that so many students go to school for degrees that cannot provide them with the training and education for future employment. Liberal Arts is quite literally a degree in “nothing”, and there are all the students going to school for art history, literature and other programs that do nothing but land them back into academia, where their paycheck goes into paying off the debt they accumulated in that school, rather than truly providing any consumer benefit to the economy as a whole. Changes in market interest rates are not something the government can just magically make go away, the are the result of shifting market practices and if a student signs up for a loan they will never be able to pay off, well, that is the fault of the students, the school and anyone who advised that student to sign.

    The burden cannot simply fall on the bank (or the taxpayers, for that matter) to cover the bad choices of a product of a complete failure of a public education system going to an academic market they are not prepared for, or the greed and manipulation of a few powerful higher (emphasis on “high”) entities who prey on and lobby for this pressure so they can continue to make money themselves. The entire system is broken on the education side, fix that, then complain about student debt being “too high”. Nobody put a gun to these kids’ heads and forced them to take that loan. The only guns being pointed are the ones aimed by the government at the taxpayers come tax season when we have to subsidize this crap.

  • John Allen

    what is wrong with the getting a lower interest rate?

  • Joseph

    Us poor college students… Being forced to take out student loans at interests rates against our will!

    Give me a break. Take some responsibility for your actions. Don’t blame someone else just because they have more money then you. Our society is in a bunch of trouble when we demand that everyone else be held responsible for our issues.

  • Poptart

    “State” colleges and Universities were built on a foundation of government funding and support for giving our citizens and education opportunity. 60% was funded by government to keep the cost reasonable for the citizens and avoid the idea the education is a business first concept. NOW, less than 40% of funding comes from government and the cost is being passed on to the university to fund causing a profit minded system. Imagine if our k-12 was burdened by this…BANKS will survive just find if they make 3% versus 8% or 10%. It is BUNK to say that they will be harmed and to compare that to house loans to people who would never be able to pay the loan. This is human capitol. Fact is: The 1% which the Right wants inequality…thats how they control and retain power. I am disgusted by the thoughts you stand on.

  • Barb

    No one is saying they aren’t taking responsibility. Refinancing is a banking action that many people take for many reasons. Get off your high horse. Or are you someone who never got a college degree and is jealous of those who have?

  • Barb

    I don’t see anywhere in the article that the bill is asking for loans to be forgiven (“People who … take on that debt should not be responsible to repay it.”). The point is to be able to re-finance, get a lower interest rate at which the former students can pay off before twenty or thirty years go by..

  • clogan98

    Wow. If you read that article, and this is the comment you came up with…I am curious as to what exactly were you reading here that said college students dont take responsibility????????????????????

  • Talk it out

    Ather, with respect, when making a law it is completely about what it will accomplish. We elect officials to make good laws, both sides are guilty of passing laws for headlines when the law is just window dressing and accomplishes nothing. This law could put people in more debt! There are fees with refinancing and a poor person may quickly jump to the conclusion of saving on a monthly payment means saving money, but if they have to refinance for a longer loan, they could pay more. I perked up to this article because something doesn’t seem right. First the headline is a lie, There are approximately 37 million student loan borrowers with outstanding student loans today. (Source: Federal Reserve Board of New York) As well not all “40 million” are hurting. On national average at least 94% of those numbers have jobs and if you don’t federal loans have systems in place to help. (I’ve used them.) We aren’t talk 40M, maybe 2, maybe, but there are systems to help. In addition Interest rates have been low and ridiculous lower still since 2009. They were already ridiculously low for pre-approved loan status before that. That’s how money works, no one is hiding this information in the age of the Internet. It’s because of a free market we can even have this conversation. With respect, sometimes it’s not all about class warfare, and in this case Republicans might be saving the poor a bad situation. Please note McElfresh’s comments on free will in accepting the terms of the debt.

  • clogan98

    Thank you! I scanned the list looking for his name, because this has RJ written all over it. i wondered why I didnt see WI!!!

  • Anonymous

    The measure of a great and growing society remains its ready availability too invest time, effort and money into welfare and education – these virtues are the hallmark of progress – growing more evident in Asia than in the US – we as a nation will falter and fail like so many less educated regions without learning and understanding, that which is better.

    Map global conflicts and recognize the confluence of ignorance with weaponry as a manifest of such lacking humanities and recognize that education remains the key to success at all levels – the support of ignorance remains societies faille.

    So here is to you, the careless and the greedy, the middle-agers of a modern world – think beyond yourself and recognize the universe for what it is and for what it can become.

  • Stephanie

    I suggest you do more research and learn more about what is actually going on in the educational system. What is happening right now is not that students are not getting enough degrees that are “marketable.” But there is a devaluation of college students in getting ANY degree. “In the United States, nine percent of computer science graduates are unemployed, and 14.7 percent of those who hold degrees in information systems have no job. Graduates with degrees in STEM – science, technology, engineering and medicine – are facing record joblessness, with unemployment at more than twice pre-recession levels. The job market for law degree holders continues to erode, with only 55 percent of 2011 law graduates in full-time jobs.” Employers are devaluing college degrees in order to take advantage of college students and have them work for less, or worse, for free as unpaid interns. While nobody is pressuring any college student to take out any loans, more are willing to do so because of the hope of economic mobility. The problem is that even after college, students do not mobilize and can not pay off their debts. You are basically damned by both options. Either you do not go to college and get a shitty job or you go to college and still get a shitty job.

  • Pete Joachim

    This is business 101 tactic. Refinance your debts. Don’t we refinance our home debts all the time! when rates drop! This is how Trump manages to makes mistakes and big bets on real estate yet never suffer personally – he forces banks to renegotiate debt all the time. So why can’t students – who are clearly in a bigger need and have NO leverage whatsoever since this debt is merely for education in order to GET A JOB!

  • John

    Joe, this is not an issue of responsibility, rather exploitation. The current Parent Plus Loan cost 8.99%, twice the cost of a home equity or auto loan, PLUS the bank gets a 4% origination fee, . Its fully guaranteed, by the gov’t, and the payee can’t declare bankruptcy, The banks currently pay virtually no cost for the money from the Feds. The program is a scam and is being perpetuated by the folks pulling the strings on these Senators. Our educational system and its cost to our young needs to be at least as good and competitive with other Western countries. Our most prestigious American schools no longer are accessible by the typical American student, even with top performing grades, and our quickly changing to educate the Global Elite. Take a closer look dude.

  • John McLaughlin

    The #GOP wastes a vast amount of energy on #whining, #bitching, and #moaning

  • Linda Pollari

    They (“everyone else”) get to refinance, and students’ don’t. That’s the point.

  • Lyn Wilson

    ‘Banks need to make money to lend money’ What an idiotic comment, that decries a total lack of understanding of finance or banking. Why not cut ‘banks’ out of the picture completely, and allow the students to borrow directly from the FED like banks do, at the same rates the banks get? Tack on a couple of points to cover the risk, and the student still comes out way ahead of where they are now.
    There’s a reason that usury is a much-maligned sin in the Bible.

  • Lyn Wilson

    Like anyone who takes out a loan to make a purchase, students should be free to re-finance or renegotiate their debt.
    Increasing the tax rate on the rich is a separate issue. Understand that during the most prosperous times in this country’s history, when there was more growth in jobs, manufacturing, infrastructure, and social benefits to all, the ultra-rich were taxed at a rate approaching 90%. We should return to a similar rate.

  • RecoveringDemocrat

    I didn’t mean that I needed someone to explain the current rules to me. I understand what the procedure is. I just don’t understand why the majority Democratic leadership refuses at the beginning of each new session to revert to the rules instituted by the Founders, requiring a real, rather than a virtual, filibuster. The original concept of the filibuster was to encourage open debate, allowing the minority opinion to be heard. Now it’s just a tool to stifle debate altogether, allowing — more often than not — right-wing extremists and obstructionists to avoid having to explain their support for policies that would be unpalatable to a majority of American voters.

  • Anonymous

    So sad that these Senators are Without Heart and their morality is bought and sold

  • Matt Brakey

    “There is no economic argument against the bill, either.”

    There is an economic argument against the bill. The argument was and is being made. You just don’t happen to agree with it. Your reasoning is horribly flawed.

  • Ken Bosworth

    Just a correction, James Risch is unfortunately one of our senators, from Idaho.

  • Anonymous

    Oh you mean like saying things like “half truths and do not cite the Bill so it can be read.” and not citing it?

  • Anonymous

    I live in NW AR and we actually are full of millionaires, but we are also full of everything Jezzer said. I just can’t wrap my head around why people keep voting against their own interests.

  • Anonymous

    Nobody’s asking for the debt to not be repaid. Reading is fundamental.

  • Talk it out

    Please verify facts. The only time I have been alive for extreme rates was 70% upper tax rate was before Reagan took office. Unemployement was high and interest rates were close to 20%. The country wasn’t prosperous. This is universally documented even if not a Reagan fan. Please verify your statements of high tax rates advancing the country so we can learn.

  • Talk it out

    agreed, refinancing is a banking action, so I’m started to wonder why the government is involved?

  • Anonymous

    The oligarchs are winning!

  • Lyn Wilson

    Not sure why I should do your research for you, but go to, and check out the years 1939-1963.

  • Lyn Wilson

    The country was extremely prosperous by any measure from WWII through the early 70s, until unrest in the Middle East and OPEC pushed oil (energy) prices thru the roof. This caused massive inflation as the cost of all goods and services soared. Carter appointed Volker to the FED, who raised the prime rate as high as 21% (when Reagan took office), and then gradually reduced it over the next 2-3 years. Reagan’s economic policies were (and still are) disasters – do you remember what a ‘Savings and Loan’ was? Tax rate info is here –
    Pay particular attention to the rates from 1939-1965. Ex. – the nominal rate for an individual filing separately making over $200K year in 1953 was 92%.

  • Lyn Wilson

    Unemployment in 1953 was 2.9%. Unemployment, from 1948-1979, averaged 5.1%. It was 7.5% when Reagan took office, and 10.4% two years later – a full two points higher than it ever was in the 70s. During his term as president, unemployment averaged 7.6%. Ya need to check your ‘universal’ documents.

  • Kim

    Our students are our future. They will not be able to contribute to society when weighed down by staggering debts. Many countries pay the students to attend college because they know an educated populace will be more productive and create a stronger economy.

  • Chris Kumpf

    Yes, reading is fundamental. Maybe I misunderstood what Jay meant by “amnesty”, you know, in the comment I was replying to.

  • Chris Kumpf

    See my comment above.

  • Chris Kumpf

    They can refinance the debt, they just need to find someone who will let them do it, you know, a financial institution. The problem is, they need a rate that is lower than current rates on mortgages secured by something (a house) that can actually be used to pay off the debt to actually pay back in a shorter time frame.

    If the cost of education (the real problem, student loans are just a symptom) doesn’t decrease, lower rates will merely mean it will take longer to pay off the same debt.

  • Chris Kumpf

    I believe they talk about not charging interest at all in the Bible, which would mean the Fed should not charge anything either, which would mean my tax dollars would be used to provide no interest loans to students, which I have a problem with.

  • Anonymous

    Your mean spirit is showing.

  • Chris Kumpf

    Here’s a citation, not of the bill, but from the CBO. It includes many of the items jagsted mentioned. It also appears the bill would not be revenue neutral, because in the longer time frame, the cost would be less than revenue generated from the tax, but I’m sure they’ll go ahead and reduce that when it’s no longer needed to pay for the cost of the program.

  • Lyn Wilson

    The country was extremely prosperous by any measure from WWII through the early 70s, until unrest in the Middle East and OPEC pushed oil (energy) prices thru the roof. This caused massive inflation as the cost of all goods and services
    soared. Carter appointed Volcker to the FED, who raised the prime rate as high as 21% (when Reagan took office), and then gradually reduced it over the next 2-3 years. Reagan’s economic policies were (and still are) disasters – do you remember what a ‘Savings and Loan’ was? Tax rate info is here –
    Pay particular attention to the rates from 1939-1965. Ex. – the nominal rate for an individual filing separately making over $200K year in 1953 was 92%.

  • Lyn Wilson

    The country was extremely prosperous by any measure from
    WWII through the early 70s, until unrest in the Middle East and OPEC pushed oil (energy) prices thru the roof. This caused massive inflation as the cost of all goods and services soared. Carter appointed Volker to the FED, who raised the
    prime rate as high as 21% (when Reagan took office), and then gradually reduced it over the next 2-3 years. Reagan’s economic policies were (and still are) disasters – do you remember what a ‘Savings and Loan’ was? Tax rate info is here – article/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets
    Pay particular attention to the rates from 1939-1965. Ex.
    – the nominal rate for an individual filing separately making over $200K year in 1953 was 92%. Unemployment that year was 2.9%. Unemployment from 1948-1979 averaged 5.1%. It was 7.5% when Reagan took office, and 10.4% two years later – a full two points higher than it ever was in the 70s. Ya need to check your ‘universal’ documents.

  • Susan Howard

    Personally, I consider these (and, most) Republicans un-American. They are all
    about themselves and their rich cronies.. and they have the nerve to call themselves
    Christians.. Education is and always has been the way out of poverty.

  • Susan Howard

    Notice, all but one is a woman.. Hmmmmm…..

  • Helder Pinto

    Those names need a picture next to them!

  • Lyn Wilson

    I agree. But realize that the sole reason we pay income taxes
    is to pay the interest due the FED for managing the money supply. If we did not have the FED (=central bank), there would be no need for income taxes, and I dare say that a public university education would be available to all worthy students free of charge as originally planned (Thomas Jefferson – University of Virginia). Until Ronald Reagan became governor in 1970, California state colleges and universities were tuition-free.

  • Marty Lee

    I was being facetious, of course. 😉

    Watch this interview with Wayne Flynt author of Poor but Proud..

  • Marty Lee

    I was being facetious, of course..

    Go to YouTube and watch the interview with Wayne Flynt author of Poor but Proud.
    Type in:

    Wayne Flynt: Poor But Proud Twenty Years Later

  • Anonymous

    I’m a lifelong Maine resident. We have a saying. Senator Collins votes right whenever it doesn’t make the difference.

    Even if there are 44 senators worse than her, that doesn’t make her much better than average.

  • P Cullen

    False arguement!! The majority of kids would not be able to get a higher education without financial help. They should not be burdoned for the rest of their lives for wanting an education while the big corporations and money mongers reap the benefits. This is an inescapable debt and can not be renegotiated, even when interest rates fall. Ask yourself who is really benefiting? You will not have any medicare or social security in your advanced years if your debt is not paid. It’s not a matter of someone else having more money than you, it’s a matter of fairness.

  • P Cullen

    Then, Reagan lowered the tax rate on the rich, implemented his trickle down theory, and the economy tanked! Also a fact!

  • j8ded1

    Sounds like the old South and its attitudes toward slavery; same mentality, different century

  • Paul E. Baylor

    James Risch is not from IN

  • Anonymous

    Factory girl, You Got It!, the RepTP Way!

  • D Conley

    Shame on them all!

  • abarnes

    When the students were taking out these loans did they not bother to read the terms of the contract(s) they were signing? On the surface, it looks like they want to change the rules of the game after the game has already been played. After the students got what they wanted/needed, they now decide that the terms they agreed to are unfair? What about the institutions that fronted the money? Did they not do their part and provide the funds? While it might be tough paying back the loans, and it is not a lot of fun, they had no problems taking the money. Accepting responsibility for our actions is sometimes tough.

  • Anonymous

    Liberal arts is not a degree in “nothing”. It teaches critical thinking, reading and writing skills, and exposure to a broad range of subjects. There have been recent articles about businesses now seeking liberal arts graduates for precisely those skills that are often lacking in graduates of a narrowly focused, specialized curricula. It’s dismaying how many graduates cannot express themselves cogently or coherently, which is detrimental in almost any profession.

  • Sean McLaughlin

    So tell me why if there is a democratic majority in the Senate, why Republican votes are even an issue? Who besides Dirty Harry voted against this bill?

  • Mike Dichtel

    This is yet another example of why the Senate must change their rules to eliminate the super majority requirement to pass bills. The filibuster needs to go away too! The Senate needs to be able to pass bills by a simple majority vote, just like to House.

  • JW

    I’m just reading the article and not Justin. My name is Berniece. Google and look up Filibuster Majority. Once a
    filibuster occurs (thanks GOP) the rules change as to how many Yes votes are needed to pass the bill. His name is Harry Reid.

  • barb

    Read the article–60 yes votes were needed.

  • barb

    ??? Only one is a woman

  • pointofgrille

    One more example of Who Really Is In Charge and Who they manipulate to get their wishes met, in spite of the wishes of the general public. Sickening and scary to this American.

  • GHY1

    I don’t think conservatives realize it but extreme conservatism is making me think we will become more of a socialist state in the future. I look at it like Monopoly when one person wins you dump the board and start over as equal. Now that the 1% own so much I have started thinking it is time for more socialism and I used to be republican back in the Reagan era

  • jb

    The banks who gave out all those mortgages knew the terms, changes the rules, and got what they wanted.. But hey those 18 year olds should know better than that, right? After all those huge corporate banks accepted responsibility, wait no I think that they needed a little help with that didn’t they.

  • joe

    yes you are right but our corrupt politicians like obama and mccain (who were running) and all the others (except Ron Paul) voted to bail out their campaign contributors (the banks). We need to throw them all out. Now they are erasing 2 years of e mails about the connection of the IIRS scandal to the White house, executive ordering young illegal aliens to jump the fence and cant be sent back, etc,etc.

  • platypus

    I’m a recent graduate and I didn’t read any fine print when I was 18. I
    just believed that I wouldn’t be able to get good job and scholarship
    opportunities unless I started college RIGHT AWAY…probably because
    everyone from my teachers to my peers to my own mother constantly
    reminded me of those lies that loan companies want every middle class family to believe. I was accepted to four schools and, despite being offered a full ride at one of them, I chose the school that had the best balance of affordability and actually having a good program for my major. Student loans don’t happen in one contract like a mortgage: you are offered a certain amount each semester that you can accept or decline. Most people accept because if you blow all your savings on an incomplete degree, then you’re screwed. Also, you’re supposed to accept your loans at the same time as scholarship, and all are categorized as “aid.” It’s confusing, and you have to go hunting across the internet and spend hours at the bursar’s if you want to read the fine print. I did everything I could to curb my debt, by commuting, (which sucked) successfully bothering the department chair for more scholarship, (which was awesome of them) and finishing a semester early. (which seemed awesome at the time but actually sucked) Nobody explained my monthly loan payments until the estimates in the online exit exam, literally after my last class. Remember, tuition increases unpredictably every year! When I took the exit exam, I was…pleasantly surprised! Following Senator Warren’s 50-30-20 plan, I was able to pay off a full loan by the time payments started, lowering my monthly payment by $30. I’m jobless and living with my parents for another year, but I get plenty of freelance work to make the payments. I’ve had spells of job hunting and one burger job, but I’ve realized that I can make more money developing my freelance career than fighting with 20 people for the privilege of a job that nobody can live off of and that a highschooler could do.

  • platypus

    Why tell a condescending stranger my life story? Because you clearly
    don’t understand how student loans work, or that college is never a
    straightforward contract guaranteeing a good job someday, or the way college has been sold and sold as an essential guarantee of a better future, costs be damned. We are all taking responsibility for our actions, and right now most of us are struggling. So don’t tell us that we could have known what we were getting ourselves into. Don’t tell us that it’s all our fault when the opportunities we were promised just aren’t there. We should be able to refinance our loans the same way any other loans get refinanced-banks don’t struggle over those types of refinancing, so why not make it an option for student loans? When this is happening to an entire generation, we clearly need some help, and refinancing doesn’t place a burden on the national debt like welfare or on employers like raising the minimum wage. The banks will survive refinancing, and get more business when we are able to afford home and auto loans.
    One more thing I’d like for you to consider: my brother attended the same college that I did, similar major, same commuting situation, only eight years prior. Although the department never offered him nearly as generous a scholarship as I received, he was able to pay his tuition by working weekends and summers without a single loan, doing the same type of freelancing that I do now. Tuition was maybe a quarter of what I’m paying off now, and there was more work to go around back then. IT’S NOT THE SAME WORLD ANYMORE

  • Mixxmaster Shawn

    This came right around the same time they voted to continue massive corporate tax breaks even though there is no funding for it. What a surprise!

  • Mixxmaster Shawn

    Remind me again who acted irresponsibly and got bailed out a few years back…

  • brian

    you mean those banks that were forced to give those loans under federal guidelines btw that bailout was paid back with interest

  • RatSavage

    You should re-read the article. Your comments are off-target because there is no way this can affect an “education bubble”, even if there was one. This bill would have enabled individuals who ALREADY attended college to refinance their loans. It was not a way to enable others to attend college, therefore it would have no impact on the things you cite, with the exception of relieving some of the burden of the crushing debt under which those graduates suffer.

  • RatSavage

    People refinance loans ALL THE TIME. Mortgages, consumer loans, business loans … Why should holders of student loans be refused the same opportunities that other debt-holders have?

    You seem to have a fundamental misunderstanding about how refinancing works. The students will still payback their loans. The lenders will still get their money. What are you even worried about?

  • RatSavage

    If you truly believe that NOBODY should be allowed to refinance loans, then please write your senator and ask them to pass that law. As things stand you are trying to justify denying certain citizens the right that others enjoy.

    The wealthy get to refinance debt as they choose. Homeowners get to refinance whenever they want, businesses refinance constantly. But you want to refuse that recurse to young graduates.

  • RatSavage

    Elizabeth Warren was trying to make it LEGAL for holders of student loans to have the same recourse to refinancing that any other loan holder would have, but the Republicans use their power to rig the legal system to punish people who were not born into wealthy families.

  • Darah Kehnemuyi

    If any “Bubble” exists, it is in the financial portion of the cost of education. The loans, including interest can be booked as assets, collateralized, re-packaged, and sold or used as security for short-term borrowing by financial institutions. Financial institutions have a balance sheet interest in preserving the “value” of high-interest loans. On the other hand the productive economy loses the value of increasing the spending power generated for consumption by people living in the real productive economy. This is nothing more than a sophisticated form of wealth-extraction. Once again, the financial economy has won to the detriment of the productive economy.

  • RatSavage

    You can easily tell which comments were written by Republicans, since they are quick to assert that students shouldn’t be allowed to choose their own destiny, but banks should. Republicans believe young people shouldn’t go to college in such numbers (only their children should have a proper education), and those with potential should be put to work making the banks more money, not improving the human understanding, or lifting our spirits.

  • RatSavage

    This isn’t about choosing between repaying and not repaying. Refinanced loans are repaid immediately with a new loan. The student will still hold a loan at the end of the day, but the interest rate will be at the current market rate, not two or three times that. The new loan is repaid just like the first would have been, over time and with interest. It is just that the interest is in line with the current market rate.

  • RatSavage

    Read about US history from 1946 through 1963. High growth, High taxes (as high as 90%). The stagnation in the 1970s and beyond started with lowering the top income tax brackets.

  • Racer X

    Is the list of senators above sorted by height?

  • Anonymous

    These are for past loans for those who have already completed college and began paying over the next 10 years. Almost every high school student in this country cannot afford college, most are not fortunate to be born into money. While I agree with some of your sentiment, this is not a reference to incoming students, but existing graduates who are struggling and not afforded the options like every other loan and future students. Artificially high prices is in everything it is what makes profit and it is what makes the world turn. Am I wrong or are you really complaining in this article about over-employment? That is a first. Be happy someone has a job and is not in the welfare “bubble” as you would probably put it.
    High school kids do not understand the stipulations of their loans, they just want a chance at a better future. No bank should run that opportunity.

  • Talk it out

    RatSavage, great point, I understand what you have said and it makes sense, but here is my response to understand the Republican’s view point. This viewpoint is not being quoted in the article, so just give it a chance to understand what they are saying, even if you disagree. Response: It’s not the same kind of money. Not everyone qualifies for low interest money. We know what happens for a fact when we pass out cheap cash to people that aren’t ready for the responsibility. The finical crisis of 2008-09. Housing bubble. There is more risk involved lending money to people without credit or lending history. More risk demands different terms. That being said, Government loans and subsidies go out without discrimination, especial to those not born into wealthy families. Yeah, Gov’t creating opportunity! Interest rates are set by the government here not banks, thus they already are super low. If these were private loans, yes they could be refinanced, but there would be fees, fees to refinance and rates would never start that low, especially without some kind of collateral when handing a that much money to an 18 year old. The bottom line for me in this whole discussion is to look into what the real monthly payments are on these loans, they aren’t that difficult if you are working. 94% of Americans that want to work are working. Of the other 6%, not all have student loans. So a very small number of folks here, not 40 million. (only 37 million have student loans, silly title to this article) So if it gets too difficult there without work, there are plans in place to create alleviation and lower or halt payments. Again, I see your point, but when it comes to handing out money we as a nation are already very liberal.

  • Talk it out

    Hey Lyn, Since rates started the discussion, how was 21% interest rate good for the poor?

    As far as the unemployment rates, the country was very different back then. We were building and creating jobs. Innerstate highways, cities and manufacturing. We were expanding not downsizing. Small cities were growing where they now sit vacant. Those jobs are not the same today with automation and outsourcing. It took more people to accomplish the same things and pay was less. Thus more people hired. It was different. Just because the two overlap doesn’t guarantee a correlation. ex: I like the color orange therefore I like orange juice.

    So I have tried to pay particular attention to your chart. But if we are going to fair and make your adjustments, let’s just use your chart from ’53. Those that make 200K get taxed at 92%. As well, if you make just 14K you get taxed at 44%, more than the highest bracket now! The lowest tax bracket is more than double today! Desiring to return to these taxes is highly undesirable by all… What do you think, will the population revolt? Be fair.

    Even though you disagree. I stand by my ‘universal’ statement. Unemployment was high as you just stated and interest rates were high which you just stated. The stock market crashed in 1979. These are universally documented, at least by you and me. My interpretation of this documentation is that the times weren’t the best in those years. To be fair, Obama had the same thing happen with unemployment rising when he first took office, and he was very focused on that at first, but it takes a little while for changes. It takes time to fix things that you inherit.

    So I disagree on the taxes for reasons stated, hope there is some common ground to be considered. I will do my research on Reagan (look up the savings and loans you mentioned), thanks for your thoughts.

  • Anonymous

    Sounds like you support only the wealthy having the opportunity to access education which seems pretty regressive. And as far as there being too many people employed by education, that depends on what it is we as a country believe we need from them. If we want ignorance to flourish, then you may be right.

  • Lyn Wilson

    The game of Monopoly is an excellent example of the ‘free market economy’ running to endgame – – one player (or small group of people) will always wind up with everything.

  • Lyn Wilson

    Guess you are opposed to divorce?

  • Lyn Wilson

    Thank you Darah! Insightful and accurate.

  • mussidie

    maybe the POTUS should have used all the taxpayer money he invested into failed green energy companies that we’ll never see again, to cover every students loans. or the money used to bail out GM? banks? maybe used the stimulus money for those shovel-ready jobs? it’s hard making decisions when you grow up!

  • Leopold B. Scotch

    Whenever racking up debt
    Its wise to consider the after-effect
    Is the pay-off worth the pain?
    Or will you forever feel your blood drained?
    Are you buying a degree in demand?
    Or just what feels good, otherwise unplanned?
    Some think this debt is now class war
    When it’s always just been “Caveat Emptor”

    If you’ve believed different, shame on you
    For being naive and embracing a screw.
    For believing politicians don’t lie
    Fodder over the top, they don’t care if you die
    But so long as you vote them in
    they’ll promise free lunches, or that you’ll always win.
    Opportunity for a lesson learned?
    No way!
    Buy the lies!
    Vote the same.
    Get reburned.

  • Leopold B. Scotch

    Education without demand for the output is a waste of money. Financing degrees for which there is no career is sheer lunacy. Yet the U.S. churns out loans for such.

    This is economics 101. It may not feel good, but economic gravity is just that. You dream of a utopia where everyone can fly / defy economic gravity. It is a recipe for economic collapse.

  • Leopold B. Scotch

    Education is an investment debt. And should be viewed as such. Too many students then go on to take degrees that are without question poor investment decisions.

    Moreover, as the economy itself is so unbalanced in other areas outside of education (for reasons related to Tom Mullen’s comments in this thread), that there are simply not enough jobs available. Each new degree that graduates is greeted by the prior years excess of the same degrees for which there are no jobs.

    This is lunacy.

  • Leopold B. Scotch

    Funny you blame the free market when it is an overabundance of intervention that has created a problem in the economy where guaranteed loans at below market rates have created an excess of degrees that the economy cannot absorb in any fashion save more intervention, and hence the loans cannot be paid off.

    And the solution is to create further distortions in the market by having the government step in an enable a below market restructuring of those existing loans, while keeping the spigot open on generating more and more taxpayer guaranteed degrees for which there are too few jobs to support.

    And that’s not even touching on the rest of the economy, and how decades of neo-keynesian policies have managed to distort the economy so badly that only through exponential intervention can it remain on life support. Rather, more like a junkie addicted to easy money, money printing from the fed, and subsidy… the progressive solution is “give the addict more of the junk that’s messed him up”.

    I understand: Withdrawal sucks. But this problem never was created by and most certainly currently is NOT anything to do with the Free Market, Lyn. Blame the interventionists. The meddlers in the economy. The bubble makers.

    That said: Yes — the Banksters want their debt slaves. Certainly. But let’s be clear — the banking system in the U.S. is run by the Federal Reserve Banking cartel, created specifically to protect bank profits from the very distortions in the markets their policies create. Blame them, yes. But don’t in any way implicate the free market. Free Market folks warned your interventionist progressive forefathers back in Wilson’s days that THIS is exactly what it would lead to. And they were clearly not the first, either:

    “If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied”.

    — Thomas Jefferson

    As for Monopoly, Henry George makes a reasonable point, and frankly I find the idea of land value taxes to be least destructive of taxes.

    Nonetheless, the flaw of his game was the premise of finite real estate and a non-dynamic circuit of wealth. The problem is not the free market. Rather, it is the strong centralization of government power so that it may be purchased by and wielded for benefit of special interests. E.g., an inventive entrepreneur would simply step his piece off the board and begin acquiring cheaper property off board, but the Bigwigs who wrote the rules won’t let him since exercising such liberty breaks their monopoly! Again, that’s NOT the free market.

  • Darah Kehnemuyi

    Staying on the same thread:
    I agree with Leonard that jobs are most important. In the short term most folks understand that a GDP that is 70% reliant on consumption requires people having money to spend. Middle term, building needs to happen for the future: public infrastructure, education, publicly funded research (NIH, etc, etc…)… Longer term: we need to get over the myth that our children’s and grandchildren’s prosperity is affected by the federal government debt we incur today. We have just finished paying off our debt from the Civil War, and that did not impede our prosperity in the 1940’s, 50’s and 60’s. Our children’s prosperity will depend on their own productivity, not our debt. We harm our children’s productivity when we fail to provide them with a useful education, adequate public infrastructure, and an adequate research and development infrastructure.

  • Leopold B. Scotch

    Apples and oranges.

  • Leopold B. Scotch

    “If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied”.
    — Thomas Jefferson

  • Lyn Wilson

    Not at all. A contract entered into willingly that one of the parties wants to modify.

  • Lyn Wilson

    You (and others here) seem to hold the opinion that the purpose of education is solely to provide a job. So, institutions of higher learning are partially to blame, for offering and charging for degrees in Puppetry, English Literature, Ancient History, and Philosophy.

  • Lyn Wilson

    Instead of ‘free market economy’, I should have said ‘capitalism’. “Free market” is a concept, and can never be realized in practice except in an extreme microeconomic scale. In a functional society, there must be trade rules in place, and regulations to protect the interests of the buyer and the society at large. Free market depends upon a willing buyer and seller exchanging goods and services at a price that is dictated by supply and demand. Your electric utility does not negotiate your residential rate with you based upon its cost, or upon supply and demand – it sets the rates as high as the state’s public service commission will allow. All corporations seek to maximize profit, and the educational ‘degree mills’ are no exception. If the ‘profit’ capability was removed from educational institutions, we’d see a whole different ballgame.

  • Leopold B. Scotch

    Your inference about me is wrong.

    I am of the opinion that if you wish to take on a loan that you are obligated to pay back with interest, then you need to consider the existing and ultimate demand that exists for that particular degree / skill-set that will enable you to make sufficient $$ to pay it back — unless you have access to other resources.

    Education for purposes other than career is purely hobby interest. Few in their right minds will loan money to someone’s hobby unless it is backed by other assets or reliable income source.

    Enter the U.S. politicians who gladly put the taxpayer on the line for guaranteeing loans for what are tantamount to hobbies since there exists no demand for the degree, They get votes, never mind it chokes the economy by misallocating finite resources. Tom Mullen is correct about the bubble.

  • Leopold B. Scotch

    There is an entire legal construct around marriage law, and an entirely separate one around lending contract law. They are both fruit, but apples and oranges within the details.

    re education loans — These people may refinance their loans. The problem is, no private lender is willing to engage most of these loans since the borrower is incapable of making payment at the prevailing rate for their risk profile. (e.g. unemployed will not find loans, those with poor income ratios will have a higher interest rate to lure in lenders…). What’s been offered is the confiscation of $72 billion of wealth over 10 years from wealthier individuals to subsidize below market interest rates to bail out these loans.

    Re taxpayer backed ed loans, the rules on default are different than other debts like credit cards or auto loans, etc., where you may declare bankruptcy and clear your loan. My understanding is that this is like owning money to the IRS. Expect them to come after you, bankruptcy or not.

    What this has to do with Marriage law, private contract modifications, and divorce, is distant.

  • Talk it out

    I guess I just don’t want a democratic government to have that much control of anyone’s income. Same with privacy issues and the current admin. Do higher taxes motivate anyone to get off government assistance? My friends who have been on assistance try not to work to keep the free benefits coming in. If they work harder the govt takes away the free ride! Work really hard or work smart and the government takes away 70% of what you earn doesn’t motivate the poor to work, in my opinion. As well, taking away 70% doesn’t motivate the rich to anything but selfishness and hoarding. There must be some kind of balance.

    Thanks for all your thoughts. I wish there was more responsibility among all of us. My thoughts on the social structure is not to blame the uber-wealthy alone, because most everyone demands cheaper prices. Rich and poor are both alike in greed and desire. The rich could take more responsibility in not offering cheaper products, but the poor could show more self-control and demand better too. I think we all want more for less and from someone else’s pocket.

  • Leopold B. Scotch

    Economic gravity does not care for bleeding hearts. The road to hell is paved with good intentions, and don’t forget it when redistributionism at so many levels kills the natural economy by raiding too much economic seed corn, eventually leading to famine.

  • Leopold B. Scotch

    Who deleted my reply poem? Was here for several hours and now its gone. What was the offense?

  • Leopold B. Scotch

    [Weird. What happened to my original comment? Who deleted it?? Moderators??!?]

    Capitalism can be free market or not. It will arrange all available resources to gain a profit. If an all powerful centralized government exists that can be manipulated to do so, so be it. Clearly that is NOT free market.

    As for free markets, you don’t seem to fully grasp:

    “Free market” is a concept, and can never be realized in practice except in an extreme microeconomic scale.

    Ok — so that’s your thesis.

    In a functional society, there must be trade rules in place, and regulations to protect the interests of the buyer and the society at large.

    Who is to determine these rules? Those agreeing to trade consensually, on a case by case basis? Or those who have managed to elevate themselves to political power, beholden to political interests? Only they are qualified to create one-sized-fits-all rules?

    Free market depends upon a willing buyer and seller exchanging goods and services at a price that is dictated by supply and demand.

    True enough. Although we should respect that personal preferences drive demand, and those can change on a dime..

    Your electric utility does not negotiate your residential rate with you based upon its cost, or upon supply and demand – it sets the rates as high as the state’s public service commission will allow.

    You lose me here. The regional utilities are by definition not free market institutions. They are government constructs awarded regional monopolies over services that protect the institution from competition under the guise of protecting the consumer.

    All corporations seek to maximize profit, and the educational ‘degree mills’ are no exception.

    Most all seek profit of some sort, or else we are charitable cases. When I exchange my labor for a wage, I expect profit above my costs of getting to work and being away from my family. A corporation is merely a group of individuals organizing more complexly to accomplish this on a greater scale.

    If the ‘profit’ capability was removed from educational institutions, we’d see a whole different ballgame.

    How so? The very essence of “profit” and “loss” is a means of keeping track so that an economy eliminates wasteful and consumptive activities that provide no economic justification for occurring. It is the seed of innovation, the germ of improve standards of living for all. It validates the value society places on your economic activity. Those who are most profitable in a free society are those who do the most to improve the lives of other individuals, or selse they’d not be profitable.

    Of course, enter central planning, big government, etc. that removes free markets from existing, and you find profits go the the most politically connected and other special interests capable of currying favor for the power elite at the expense of their competition.

  • moderator

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    Please read our comment policy before commenting.

    Moderator @ Moyers

  • Lyn Wilson

    No doubt that there is a bubble. There is much truth in what you (and Tom) say about the lack of wisdom involved when a student takes out massive loans to study basket-weaving. The institutions making those loans, however, should bear some responsibility for assessing the risk involved when making the loan. However, profit rules. The banks make the loans, package them like they did the sub-prime mortgage loans, and trade the package as a commodity. When default rates begin to rise, the banksters lobby Congress to request government subsidy of the loans. The motive is not to replace the principle/interest lost on a loan default – – the motive is to shore up the derivative as a tradable commodity, which provides the banks much more income than the interest from the loans.
    A local law school was recently in the news, as InfiLaw (a company that buys/runs law schools) made a bid to buy it. It came out that the 5 local judges that started the school 10 years ago were withdrawing profits from the school to the tune of $2.5MM per year – in ten years, a relatively small law school had generated $25 million profit in addition to expanding its campus and facilities. Although not explicitly stated, it must be assumed that the profits and operating expenses were generated from the tuition and fees paid by students during that time. Making another assumption – that a good bit of the tuition and fee money was borrowed – shows us exactly what the educational system is: a transfer of wealth based upon (often false) marketing leading students to believe that a college degree is the ticket to successful employment. How many online universities have popped up in the last decade? Do you think they are really driven by the desire to help students get a worthwhile education?
    Practically every day I interact with degreed managers, engineers, and programmers who are incapable of composing a complete and grammatically correct sentence. “The love of money is the root of all evil”. Our sins have come home to roost.

  • Leopold B. Scotch

    I think we generally agree on many levels.

    I would add that these loans would NOT be getting made if the actual lender were required to bear the full liability of the loan rather than having it guaranteed by the taxpayer immediately at issuance. As you note, this debt is repackaged and sold off ot other investors, but those investors rely on the same taxpayer guarantee.

    These loans are more akin to the mortgage loans implicitly guaranteed by Freddie Mac and Fannie Mae, where the loans they were among the lowest quality / borrowers who would otherwise not qualify. They were then repackaged and resold, and ended up being a large part of the problem down the line and the U.S. taxpayer has picked up the tab for complete and utter mismanagement at those highly bureaucratic / political institutions.

    To your point, the broader private mortgage market collapsed and the rest of us paid for bank malfeasance.

    Don’t let the Federal Reserve off the hook, either. They are the ones who created the liquidity behind the housing markets that flowed into the real estate and credit market bubble, and they are currently the ones printing $ trillions to support below market interest rates and creating the liquidity that finds homes in taxpayer guaranteed education loans.

    Without the combined efforts of the politicians (Sallie Mae, Taxpayer guarantees) and the Fed (a privately run baking organization), interest rates would be much higher for education as would be underwriting standards. Lenders would actually care about what their investment was buying, and higher rates would weed out degrees with no returns.

    As for that law school, I don’t have a problem with the profit element of it so long as their students are getting a good value for their investment. Somehow I’m doubting it, although Lawyers seem to always find a place the more an economy is tangled with layers of highly complex regulations.

  • RatSavage

    Tom, this isn’t a bailout. The borrowers will still owe the same money they owed before. The only difference is that a legal barrier will be removed that prevents the debtors from refinancing the way every other borrower is able to do.

  • RatSavage

    I appreciate your reasoned comment. I do disagree with a couple of points, however.

    First, just because the rate is set by lawmakers and not the market does not mean it is too low; actual (dare I say “rational”?) rates are set by the market, and are much lower than these artificial rates, which is why refinancing is a valid option (if lawmakers hadn’t chosen to deny that option to student loan holders).

    Second, if you are looking for a group that has demonstrated financial recklessness and yet is receiving artificially low rates from the government, take a look at the banks, who wrecked the economy, but are still receiving special rates at the Fed window.

  • Moderator

    Thanks Ken. We’ve made the correction.

  • JIm

    the person who pursues such degrees is to blame, not the institution for offering it……

  • Meiscc

    Well I’m a little late to the ball game but it’s nice to see some commentary without name calling and good points on both sides…just wanted to add one thing to Lyn’s comment above. It is also partly human nature that ends up allowing the one or few to end up with everything. This occurs for many reasons but unfortunately the Government puts in place laws / rules / regulations that aid in helping the few.