Dissecting the President’s Student Loan Plan
This week on What this means for students, we are going to take a look a President Obama’s new student loan plan. College students and alumni have been at the mercy of the private lender for decades now. What the President’s plan does is instead of contracting the loans out to private lenders, the government would loan the students the money themselves.
Contrary to logic, this plan will save the government money over time (approximately $87 billion over 10 years). The loan industry is fighting this plan because it will take money away from them. One of plans the industry gave in response to the government’s used accounting tricks to take money ($15 billion) away from low income students who receive Pell Grants.
Predatory lending has not been limited to the housing market. School and private lenders have preyed on students. Just check out this article that was in the LA Times. The Obama administration added money for financial literacy and the loan industry compromised and put the same amount of money into advocacy of students. It’s good to see that no matter which bill gets passed the students are going to be looked out for.
Do you think the President’s plan will help students? Comment below to show your support or dissent!