The Student Loan Deal Cost Us $52 Billion
Wednesday, March 31, 2010 at 3:38PM Those tricky Democrats, just look at what they did. They told another little fib. This from CNSNews:
The student loan overhaul legislation signed into law by President Barack Obama on Tuesday could add $52 billion to the deficit between 2010 and 2020 when the cost of the market risks and administrative expenses of the loans are taken into consideration, the non-partisan Congressional Budget Office (CBO) reported.
“The CBO recently estimated that whereas loans issued in the direct loan program between 2010 and 2020 would reduce the deficit by a total of $68 billion under FCRA accounting, those loans would increase the deficit by $52 billion on a fair value basis,” reads the March 2010 CBO study, Policy Options for Federal Student Loan Programs. (See page IX of the Summary.)
The CBO report further notes that it explained its calculations about the budgetary impact of the administration's plan to change the federal student loan programs and the $52-billion addition to the deficit in a March 15 letter sent to Sen. Judd Gregg (R-N.H.), the ranking member of the Senate Budget Committee.
Reader Comments (5)
Yeah, that's a real shocker. These lying snakes never stop. I despise them more with each passing day.
I place the blame for this squarely on the media. Just like they didn't cover Cantor getting the death threat, they didn't do any due diligence on this. They're really beyond worthless.
They are just reporting the news as "THEY" see it, who would believe the State run
media would fib, Never,never in a hundred years........and that congressman Henry
Waxman, man that guy is ugly, i mean fut bucking ug-lee, If this guy ever looks up in
a rain storm he for sure will drown, that nose will hold ten gallons of water....
From the Heritage page which echoes the CBO sentiments and talks of further issues with this federal takeover.
http://blog.heritage.org/2010/03/12/college-is-about-to-cost-you-even-more/
"But, as Heritage wrote last year, this federal takeover, originating with the House SAFRA bill, would be a bad deal for students and taxpayers:
[The proposal] would end the FFEL program in 2010, shifting all student aid lending into the federal government’s Direct Loan program and the Federal Direct Perkins Loan program. This proposed change is premised on the belief that ending subsidies to private-sector lenders will reduce government costs and that the federal government will administer student loans more efficiently than private lenders do.
In July, CBO Director Douglas W. Elmendorf acknowledged that the original CBO projection did not adjust for the cost of market risk of increasing defaults that the federal government will assume with the shift to direct lending. In addition, there is a danger that taxpayers’ costs could balloon if the federal government proves less efficient in administering and collecting loans than current private-sector lenders, which have an incentive to administer and collect loans efficiently in order to maximize profits.
There are also concerns that the elimination of FFEL and shift toward direct loans would lead to worse service for borrowers. Right now, college students have the opportunity to originate loans with the federal government through the Direct Loan program; however, most borrowers choose to take loans from the private-sector providers. If the federal government is given responsibility for making and administering all loans, there the quality of service in loan administration could be poor, presenting challenges for borrowers and colleges."
B-rude
Not only that B-rude, but I don't trust that the government would approve the loans for the right reasons. I think it would become another den of political correctness where the Democrat constituency is given preference. It would be a disaster.