Banks to lose billions in student loan revamp

[Rage Inc.]

Source: MSNBC.com

WASHINGTON - Banks and other private lenders are about to lose a $70 billion-a-year student loan business, part of a massive overhaul of college assistance programs that has received an unexpected boost from President Barack Obama's health care success.

Industry lobbyists have watched helplessly as Democrats and the Obama administration appear on the verge of shifting student lending from private banks to the federal government.

Under the measure, private banks would no longer get fees from the government for acting as middlemen in loans to low- and middle-income students. With those savings, the government would increase Pell Grants to needy students and make it easier for workers burdened by student loans to pay them back.

The bill would mean the loss of billions of dollars in business to student lending giant Sallie Mae as well as large financial institutions such as Citigroup, JPMorgan Chase and Bank of America.

Read more: http://www.msnbc.msn.com/id/36014592/ns/business-us_business/

---

How are we supposed to go on living now????? :cry:

[closeupready]

1. That's extremely sad.

:cry:

[Enthusiast]

104. That's what I was thinking.

[crikkett]

116. LOL!!!!

:rofl:

[bluestateguy]

2. Boo. Fucking. Hoo.

nt

[name not needed]

27. Took the words right out of my mouth.

[GoCubsGo]

62. Mine, too.

Unfortunately, their patrons had better prepare themselves for another round of fee hikes, etc.

[BeyondGeography]

3. Another crushing blow to freedom

:silly:

[strategery blunder]

4. Awww. Poor widdle banks.

:cry:

[aquart]

5. I weep. How sad.

[Liberal_Stalwart71]

6. That's unconstitutional! Corporations are people, too!!

:sarcasm:

[No Elephants]

50. Then, it's not only unconstitutional, but downright cruel. Oh, the humanity! Er, Oh, the corpority

[cyberswede]

7. I can barely read this through my tears...

Seriously, though, what a waste of money that was to give fees to banks to lend to students. This is a much better way! The government and students will get more bang for their buck.

[KansDem]

9. Careful what you say!

...more bang for their buck.

You'll have Michael Steele and the RNC all over this!

[wolfgangmo]

43. "You'll have Michael Steele and the RNC all over this!"

Only if there are tittie bars and private jets involved.

[Rage Inc.]

117. I think that's what she was implying

:evilgrin:

[jbnow]

119. Also seriously on MTP Sunday Linsey Graham talked about

this as a terrible legacy for student loans. How the federal government takes over the student loans and screws it up like Fannie Mae and Freddie Mac did on housings and that we rae taking money from student loans to pay for health care.
(Schumer was on at same time and didn't respond to that at all)

[2Design]

8. Yeeeessssss - finally one for the peasants n/t

[Roland99]

10. Damn....just emptied my box of Kleenex.

[Kelvin Mace]

11. Blanche Lincoln was whininng about

40,000 people losing their jobs. Yeah, 40,000 fewer loan sharks in the world makes me sad.

[No Elephants]

51. .They won't necessarily lose jobs.

The government is going to need people to administer its student loan program.

[bhikkhu]

70. A government sponsored jobs program -

- financed by fees upon college loans...hardly seems like a good idea, but I imagine the RW would be supporting it all the way.

[Beartracks]

65. Just have Casada tell them to "Get a job!" n/t

[laughingliberal]

93. Like she ever gave a damn about any job but her own. nt

[kenfrequed]

96. Blanche Lincoln is an idiot

Honestly, what wouldn't be better for the economy than reducing the debt burden on recent college grads and new families? They have to buy all manner of consumer goods and durable goods to start out their households. By making them forgo this to prop up the financial industry over a solid goods industry we are actually hindering economic growth and redistributing wealth towards the wealthy. It is fiscal idiocy.

She is figuratively deep in the hock to large corporations, big banks, insurance, and the Chamber of Commerce so I suppose she must figure that we should be literally married to them.

[AllyCat]

100. Doing my part to end her podium to whine. Contribute to Halter everyone!

It's like her being sad that the mob bosses are losing grip on their markets.

[Supersedeas]

121. oh how RW'ers and DINO love to employ Corporate Middlemen to spend taxpayer dollars

but then cry about too much oversight and too much spending on Edumacashions.

[4lbs]

12. The banks will have to make do with those exorbitant "insufficient funds" fees they collect on

overdrawn checking accounts.

You know, how they charge up to $50 per check, four times, for $200 in fees on a single check. You'd think they would flag that check after the first charge, so it wouldn't keep going through, but hey, they'd miss out on the additional $150 in fees.

[Rage Inc.]

13. Love your sig!

Especially Beck, the Lurching Frankenstein! :toast:

[tomm2thumbs]

17. ditto on your sig line

great stuff

[Godhumor]

28. Actually, those will be going away as well

NSF fees have been targeted as "predatory".

Edit: Well, more accurately people will have to "opt-in" to overdraft fees. Somehow, I don't think many people will be doing so (Idea is that people will say "yes, charge me a fee so I can continue to use an account with low or no balance" or "No fee, just decline all transactions that would exceed my current balance.").

[Beartracks]

67. Repeat presentation: the gift that keeps on giving!

"No sir, we have no control over that process. It's automated. That check last week was presented three times as a courtesy to you :) before we declared it officially bounced and sent you a notice through snail mail. ... Oh, no sir, the activity on the account whereby $35 is charged for each incident of insufficient funds is wholly separate from the courtesy we conveniently extend trying to cash your check. ... Yes sir, I'm sorry for the inconvenience of having your grocery debit fail because the balance on your account went negative before you got to Walmart that evening. ... Oh, I see -- it looks as if your mortgage payment generated another insufficient funds fee. So did that $3, er $38 drink at the convenience store. ... Yes, sir, the mortgage company can also charge you their own late fee. I see that pending in the debits now. I really do apologize for the... Oh! You are correct, sir. We ARE your mortgage holder!"

:eyes:

I also like how for SOME REASON a pending charge on my account will always go through before a pending credit -- you know, just in case that can screw me over...

:mad:

[DatManFromNawlins]

72. When I was living in Dallas

I overdrew my checking account during a move from one town to the other after the bank failed to update their records for days. I mean for nickle and dime stuff... a coke and a candybar... lunch, etc, etc.

Even though they had "overdraft protection," I ended up with $400+ in overdraft fees on my debit card and they suspended the debit card altogether. Had the money in savings, but apparently that didn't matter.

[laughingliberal]

94. Yeah, funny stuff. Banks trying to drum up sympathy about their loss of our money. nt

[corpseratemedia]

14. more Free'domz being tak'en away!1

:dunce:

[mike_c]

15. Sallie Mae in particular will just find new and creative ways to squeeze...

...those of us they've already ensnared in a lifetime of debt peonage.

[Tansy_Gold]

25. You said it. Some of us will never know freedom from this shit.

[RKP5637]

68. Yeah, the new American way of life, the American dream, life long bank debt. n/t

[WinkyDink]

16. UPDATE: Banks Will Still Make Profits. Film at Eleven.

[Lugnut]

18. Good.

It's way past time to cut out the unnecessary skimmers that add nothing of value to the process.

[mbperrin]

19. Nailed it!

nt

[defendandprotect]

20. My heart breaks . . . + our neighborhoods are loaded with banks and medical offices ...

like to see both of those drop as power changes hands --

and we get into preventive medicine -- taking care of problems before

they become major!!

We also need more GP's -- less specialists!

And more midwives!!

[jwirr]

21. Good. They have made education un-affordable for too long. Time

they were called out and this ended.

[howmad1]

91. Education unaffordable? Right on!

After all, most educated people vote democratic. Holy shit, can't have that. Next thing you know those banks will have to put up with rules and regulations coming from educated poeple. Damn fucking education. It'll ruin us.

[eppur_se_muova]

22. Nothing that happens to Sallie Mae will be bad enough to suit me. nt

[EnviroBat]

23. I wish all of the private loan servicers would go out of business too.

Great Lakes can kiss my ass. But, unfortunately I signed into a contract of life servitude when I thought I was financing a meaningful college education only to become a number taking on debt forever. So, I dropped out when I realized this "product" I was financing wasn't worth a shit. Too bad I can't return it for a full refund.

[EnviroBat]

24. It blows my mind that NOTHING like this would have ever

happened with the fucking republican scumbags in power.

[zbdent]

26. To paraphrase a Monty Python bit ...

"Our bonuses will PLUMMET!"

[snooper2]

29. But Obama is a corporate whore who does the banks bidding!

:eyes:

[Stellar]

30. Exactly why he didn't feed it through the banks...

because he loves them so. LOL!

[BlancheSplanchnik]

58. wonder when those folks will come along and make amends

not that people don't have the right to shout whatever they want...but I've always respected the maturity to admit it when you're wrong ('specially when that wrongness involved a lot of nastyness.)

[laughingliberal]

98. I give the President credit where it's due. This one he deserves credit for.

In fact I started an OP a week or so ago about this and praised him for it.

That does not mean he is not, at times, deserving of criticism. I have liked some of what he has done and I have really disliked some of what he's done. It's a little disingenuous for people to talk about those who don't show up to admit when they're wrong every time something is done correctly. See, here's how that can work-when he's right I say so and when I think he's wrong I say so. I hope he provides me with many more opportunities to say he got it right.

[kirby]

31. Taxpayers to gain billions in student loan revamp n/t

[FailureToCommunicate]

44. "$26 Billion", I just heard Obama say, "...and that's not small money"

[rpannier]

60. 2-and-a-half times the amount

that disappeared under the CPA in Iraq during Bremer

[dipsydoodle]

32. Coo

:thumbsup:

[flyingfysh]

33. I used to work for a student loan company

It arranged loans for the banks, and collected lots of fees. Everyone working there knew that students would be better off with federal loans, and now it's finally happened.

This should essentially put my former company out of business; and I don't feel a bit sorry for them.

[LisaM]

34. My student loan experience with banks was horrific

so my caring level is at zero here.

I got a loan from a small local bank. Everything was fine at first, low interest, easy payments. The problems started as the first the bank, then the loan, was sold and re-sold and all the terms changed! They took away the grace period (which I usually needed so I could pay it after my payday) and eventually one place that I wrote the check to wrote faulty checks to the previous or new institution and one or the other was demanding that I start paying in certified checks!!! That was absolutely impossible for me to do at the time and I eventually got everything paid off, but the experience was quite horrible. I'm sure my story pales in comparison to some others.

[Hekate]

35. Oh gawd, I am soooooooo sorry. How sorry? This sorry --> ROFLMAO

:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

[still_one]

36. Ah, I can just see the repukes, teabaggers and MSM coming to the defense of the poor banks

[Jakes Progress]

37. Never should have been a profit base for private industry in the first place.

So many things fall into this category. Healthcare for one. Railroads. Probably maintaining the nation's infrastructure. These should be a national concern not a profit pot for opportunists.

[liberal N proud]

38. Let me call the fucking wambulance

These fuckers have raped us for years, making higher education impossible for most.

It's about fucking time they are taken out of the equation. It is a little late for our daughter, we had to carry the loans for her, she just graduated.

I am hoping there is some help in repayment process though.

[KansDem]

39. T.S., bankers...maybe now you'll start working for a living.

Give it a try and join the rest of us...

[meeshrox]

40. Good riddance!

[valerief]

41. But what are they going to hide in offshore accounts NOW????

Alas, alack!

[Taverner]

42. AWESOME

And once again, if you bankers feel shafted then JUMP MOTHA FUCKA JUMP!

[RKP5637]

69. +1000, n/t

[Zynx]

45. Good. That was profound economic waste.

[santamargarita]

46. Good! Fuck those greedy bastards!

This is way overdue.

[JDPriestly]

47. How awful! Future college graduates will be able to spend their own

hard-earned money and not give it to bankers.

Seriously, this could turn us into a nation of manufacturers and entrepreneurs rather than into a nation of debters under water and bankers with so much money they don't know what to do with it other than to gamble it away.

[tjwash]

48. Don't worry...the supreme court will figure out a way to reverse this.

Saying it is against the banks freedom of speech or something bizarro world like that.

[kestrel91316]

49. Headline SHOULD read:" American consumers and taxpayers to SAVE billions....."

[nradisic]

52. Boo-Fucking-Hoo!

Call the waaambulance....Karma is a big fat bitch and she's coming to get you!

[kath]

53. Hmmm.... Let me guess- Did privatization of student loans begin under Saint Ronny Rayguns?

That wonderful man who did so many good things for this country - things that just keep on giving and giving and giving??

[marmar]

54. OH NO !!!! Who's a bankster to exploit these days?

[ShrimpScampi]

55. Finally!

Putting people, education and common sense BEFORE the almighty Greenback God! I have zero pity for these banking middlemen.

[No Elephants]

56. Didn't the federal government make NDEA student loans directly (w/ banks)?

http://en.wikipedia.org/wiki/National_Defense_Education_Act

http://www2.ed.gov/about/overview/fed/role.html

[eridani]

97. Indeed it did. 2% interest.

I was lucky to have been a beneficiary of that program and am glad that younger people will now get that chance again.

[pundaint]

57. I don't care if they lose, the big thing here is that the People are better served.

[rpannier]

59. Sounds like a violation of the Geneva Convention

Cruel and Unusual...

What happened to too big to fail???

[Jefferson23]

61. SMILE, though your heart is breaking, SMILE, even though

it is breaking
When there are clouds in the sky
You’ll get by…

If you smile
With you’re fear and sorrow
Smile and maybe tomorrow
You will find that life is still worthwhile
If you just…

Light up your face with gladness
Hide every trace of sadness
Although a tear may be ever so near
That is the time you must keep on trying
Smile, what is the use of crying
You will find that life is still worthwhile
If you just…

Smile, though your heart is aching
Smile, even though it is breaking
When there are clouds in the sky
You’ll get by…

If you smile
Through your fear and sorrow
Smile and maybe tomorrow
You will find that life is still worthwhile
If you just smile…

That is the time you must keep on trying
Smile, what is the use of crying
You will find that life is still worthwhile



Come on banker guys, SMILE, I know I am!

[goclark]

63. My cousin's girlfriend is a young Dentist

She is $150,000 in debt for Student Loans.

Yes, she has a nice job but they want to get married.

She wants to have children right away.

His job is OK but it won't help pay off those loans.

They are the lucky ones ~ there are so many talented young adults that are paying so much to get an Education.

Let's hope this helps them!

:bounce:

[Jefferson23]

64. I hope so too, the vultures needed to be stopped.

[Hippo_Tron]

103. As a dentist I would imagine she makes more than she owes in a year which means it's manageable

However, it's certainly worth considering that when we complain about the price of dental care (and medical care for that matter) part of the reason it is so high is that doctors and dentists have to make pretty high salaries if they are going to pay off their exorbitant student loans. This could have a positive impact on people who don't even have student loans.

[1monster]

112. Hmmm. I might go along with that explanation if teachers were paid better. They have to

take continuing education/certification/recertification classes the rest of their careers. Even when they earn Masters and Doctorate degrees, their salaries don't go up much.

And they have to pay for those classes the same as doctors, dentists, and lawyers have had to pay for theirs.

[RKP5637]

66. Good!!! I feel so sorry for the F'ed banks. Maybe all of DU should chip in and send them money.

:cry: :cry: :cry:

[Blue Owl]

71. Tough shit -- there are things more important than money

education being one of them

[defendandprotect]

73. $65 billion savings for government ..... that's us!

[AlbertCat]

74. So what else is new?

Banks are also MAKING billions.

[Joey Liberal]

75. My heart bleeds:)............. nt

[Autonomy]

76. So I guess they will be pursuing me all that much more

forcefully. This measure comes a few years too late to help me. I am buried in tens of thousands of dollars of student loan debt with no hope of getting a job.

[Strelnikov_]

77. The big banksters right to dip their beak is enshrined in the Constitution

It's the 'MERICAN WAY!!!!!!!!!!!!!!!

[lonestarnot]

78. JMJ!

:D

[Suji to Seoul]

79. Oh, the poor, poor mutli billion dollar, too-big-to-fail banks. Who will ever look out for their

interests?

Will no one think of the big person any more???

[reflection]

80. Love it.

Good job, guys.

[Bobcat]

81. Accuracy in media??

So how much have the banks made since the government made them the middleman? A REAL journalist would include THAT calculation in their story right along side the amount they stand to lose.

[BrklynLiberal]

82. How does one spell schadenfreude?

[MindandSoul]

83. Were are thy going to get their million dollars in bonus pay next year????

Doesn't seem fair to take money from the banking CEO's and give it to students!. . .

[fascisthunter]

84. I'm Screwed already, but good for those who are taking out loans

the fact you have to pay of your pocket for a higher education, proves this country could care less about itself.

[uberblonde]

85. This is four days old.

Shouldn't be in breaking news...

[Quantess]

86. I'm glad that it is in LBN. This is news to me. (no text)

[bemildred]

87. Students and their families to gain $70 billion in much needed relief. nt

[Toasterlad]

88. This Is a Good Move By Obama.

Credit where credit is due.

[TomCADem]

89. Oh Nooo! Save the bankers!

[livingonearth]

90. Oh no, the government is taking over the government student loan business.

[ericinne]

92. I used to have a great card

I used to have a WA-MU card that had GREAT rates, and as an added plus, it let me monitor my credit score for free. Then, they went under and it was bought by J.P. Morgan/Chase. Soon after, for no reason at all, my credit line was cut in half, I figured, no biggy, I rarely use that card. Then a few months after that, they jacked up my interest rate to 29.99%... again, no reason at all, I was never late, I always paid at least double the minimum, my balance was under $200 always.

Well, needless to say, that was the last straw. I promptly called them up, paid my card off, canceled the account, and told them to make sure it reflects on my credit that the account was closed by customer's request.

So now I'm hearing from this thread they ain't gonna get some tax payer dollars anymore...

Yeah, I'm totally fucking devastated and perturbed to hear of their loss... yeah.. sure am..

[activa8tr]

108. Great post! n/t

[kenfrequed]

95. On this I become a bit of a cheerleader for Obama

I don't get to do it often but I am breaking out my pom-poms for this one.

YAY Obama!!!



(Of course it would be better if we made education free and made it a lifetime program but one step at a time.)

[Supply Side Jesus]

99. Welfare Queens

Let them make a real living!

[AllyCat]

101. I've never been so happy I got my loan through a credit union.

I've had no trouble so far. Had a loan for the first degree through Sallie Mae before they got too big for their britches.

So sorry to hear all of your horrible stories and glad to hear that something immediately good will come out of this bill.

Way too long in coming, this.

[DFW]

102. Stop yer gloating. Don't y'all realize the misery this will create?

This could reduce some bank CEO's bonus from $100 million all the way down to $40 million, and after taxes
(which they don't pay, but that's a minor detail), that's only $25 million. That's less than $70,000 a day.

How's a poor hard-working bank CEO supposed to survive on that?

[Melusine]

105. Terrible news.

Just Terrible. Not!

[lostnfound]

106. Rephrased, "Taxpayers to save billions in student loan revamp"

Every time a program is revamped in a way that reduces costs by reducing payments to corporations, it gets captioned like chicken little - the sky is falling - "Banks to lose billions..".

When a program is revamped in a way that reduces payments to ordinary poor people, it gets captioned like a shining knight - "Billions to be saved through welfare revamp" for example.

More framing.

[femrap]

107. Cynically speaking,

I bet Rahm felt it was politically advantageous to do something for the young 'uns who worked so hard to put Obama in the WH.

I grew up with Federal Direct Student Loans. I don't know who was responsible for putting the Banks in the middle of the loan...(W? Clinton?)

And in the overall scheme of things, the Banks didn't lose much given that they've been allowed to carry all of these Foreclosed Houses on their books at cost.

I am such a cynic that I feel this to be a nice crumb. Yum.

[blondeatlast]

109. B-b-but that's just awful! Some recipient of a heritage student loan

will now be out of his $150K job!

[kentuck]

110. So...

that's good, right?

[L0oniX]

111. Die!

[Starry Messenger]

113. I'm sure they'll find some way to take it out of us

[Fire1]

114. Good! Fuck em! K&R

[get the red out]

115. But...but...but!!!

You can't just kick banks off welfare like that! }(

[CLANG]

118. Good-bye cruel world!

I just can't handle the remorse of helping elect a Bank HATER! :cry:

[harun]

120. I wonder if the Dem's will get any credit for reducing Corporate Welfare?

(rhetorical question)

[Rage Inc.]

122. Locator

Sorry, but I couldn't find this post of mine in GD or LBN (where it originally appeared).