The new Budget Passed the House

[Keino]

And it is a travesty. Extension of tax cuts, while at the same time making significant cuts in things like Medicaid, Student Aid, AFDC. Im glad we have a Government that is working for the will of the people and not in the interests of he richest 1% of the country.:rolleyes:

[fent]

actually, before you go off on student aid, maybe you shoud look at what's happening. the government pays banks for federally guaranteed loans that don't meet a certain rate of return to ensure that the banks don't lose money taking on these student loans. if the bank happened to make MORE than the set rate, then they got to keep it, kind of like a bonus. with passage of the DRA, the banks will now refund that money back to the treasury rather than keep it (makes sense that if the gov't is going to guarantee a set percentage, the banks should give back to the taxpayers anything over that limit). furthermore, all the new fees that were proposed have been removed (so there's nothing new to pass on to students) and the gov't is now only insuring the principal of the loans up to 97% instead of 98% so the banks take on more of a risk instead of leaving it all on the fed. gov't and, ultimately, the tax payer. just thought you'd like to know what's REALLY happening as far as the student loans go.

[Spence]

Students will see increased repayment costs.

[OCSkinzFan]

And it is a travesty. Extension of tax cuts, while at the same time making significant cuts in things like Medicaid, Student Aid, AFDC. Im glad we have a Government that is working for the will of the people and not in the interests of he richest 1% of the country.:rolleyes:
Sometimes you get what you pay for.
:rolleyes:

[CNYSkinFan]

I hate it but the public voted in these losers (no offense Fent you know it is not personal) and in some way we deserve it. IT would be a big mistake for the house to put through a draconian budget in an election year. Perhaps a little pain will actually bring the Dems the issues they need to succeed.

[Keino]

actually, before you go off on student aid, maybe you shoud look at what's happening. the government pays banks for federally guaranteed loans that don't meet a certain rate of return to ensure that the banks don't lose money taking on these student loans. if the bank happened to make MORE than the set rate, then they got to keep it, kind of like a bonus. with passage of the DRA, the banks will now refund that money back to the treasury rather than keep it (makes sense that if the gov't is going to guarantee a set percentage, the banks should give back to the taxpayers anything over that limit). furthermore, all the new fees that were proposed have been removed (so there's nothing new to pass on to students) and the gov't is now only insuring the principal of the loans up to 97% instead of 98% so the banks take on more of a risk instead of leaving it all on the fed. gov't and, ultimately, the tax payer. just thought you'd like to know what's REALLY happening as far as the student loans go.

Lenders/Banks Who will in turn pass on the costs of funding eductation to Students by making repayment terms less favorable, ie increasing interest rates. Im glad you left that part out of whats REALLY happenning.

[Keino]

I hate it but the public voted in these losers (no offense Fent you know it is not personal) and in some way we deserve it. IT would be a big mistake for the house to put through a draconian budget in an election year. Perhaps a little pain will actually bring the Dems the issues they need to succeed.

They passed it 216-214. Mr. Bush is expected to sign it into law. IMO this places an even greater importance on the mid-term elections and frankly this should be used as issue #1.

[fent]

Lenders/Banks Who will in turn pass on the costs of funding eductation to Students by making repayment terms less favorable, ie increasing interest rates. Im glad you left that part out of whats REALLY happenning.

the only thing that's changing fee-wise is the amount insured. 1% makes a HUGE difference let me tell ya. the government isn't making the banking industry pass that cost along. continue your misguided detest, though.

edit:

upon sleeping and re-reading this, that response is a little juvenile. so in the spirit of trying to get this forum turned around...

the only potential fee that students could see is the banks requesting that they cover the 1% of the principal that is no longer insured by the federal government. however, should the students see that fee, it is the banks saying "it's not enough for the federal gov't to guarantee our profit levels, we need to force each student to pay this 1%, even though we only stand to lose it on students that go into default (the national default rate is only 4.5% by the way)," not the government forcing that fee onto them. i don't have "government accepted" data (i just took over education matters, so i'm still trying to get everything organized and sort through our old guy's info), however, this (http://www.acenet.edu/AM/Template.cfm?Section=CPA&Template=/CM/ContentDisplay.cfm&ContentID=10733) link tells us that at the end of 2004, student loan volume was $50.5 billion. by cutting 1% of the insurance and putting that risk on the banks (who will still be reimbursed 97% should someone default) the federal gov't potentially saves $505 million (1% of the total). but we're not just talking savings in this bill. we also increased student loan limits and expanded grant aid to low-income students to allow more flexibility and greater opportunity for students that didn't have it before. if you have hard numbers or info from widely accepted research to counter this, i'd love to hear them.

edit again...the link is correct now.

[Keino]

Fent, it still means less favorable repayment terms for students, thus increasing the amount they pay in interest in financing their education. While the Govt isn't making Banks pass this cost along, do you think any bank, as a business practice isn't going to do just that? Certainly that has to be considered as an obvious consequence of the policy, no? Your attempts to gloss over this fact are hilarious. I never made the argument that the Govt is forcing banks to pass on the cost, but since I work in the industry, I have a tad bit of insight into how banks work and think. You're right about the default rate and I think that lends itself to what I am saying. Banks perceive an increase in risk as a result of the policy. Consequently, they minimize those risks by passing the projected costs of those risks along to the Student borrowing a federally guaranteed loan. Whether the risk is real or perceived won't change how banks operate.

[Spence]

Fent, it still means less favorable repayment terms for students, thus increasing the amount they pay in interest in financing their education.That's correct.

What's more, thousands of poor, mostly children, will lose medical benefits under this budget. Meanwhile, a $22 billion Medicare subsidy for the insurance industry that had earlier been targeted for elimination was left in the final budget. So we can afford to pass out $22 billion in subsidies for one of the wealthiest industries in America, but we can't afford to make sure a few thousand poor kids get the medicine we need.

That's compassionate conservatism, baby.

[Keino]

That's correct.

What's more, thousands of poor, mostly children, will lose medical benefits under this budget. Meanwhile, a $22 billion Medicare subsidy for the insurance industry that had earlier been targeted for elimination was left in the final budget. So we can afford to pass out $22 billion in subsidies for one of the wealthiest industries in America, but we can't afford to make sure a few thousand poor kids get the medicine we need.

That's compassionate conservatism, baby.

We can't have these kids sponging off the System Spence. They have to pick themselves up by the bootstraps and find a way to pay for quality Health Insurance and not immorally burden the system asking for hand outs. Remember, God only helps those who help themselves.....