Interesting federal student loan overhaul plan

Discussion in 'Politics, Religion, Social Issues' started by Zombie Acorn, Jan 23, 2016.

  1. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #1
  2. citizenzen, Jan 23, 2016
    Last edited: Jan 23, 2016

    citizenzen macrumors 65816

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    Haven't looked into the idea, but as a number of you have claimed that student loans will be the next big bubble to collapse and bring down the economy, how does this plan do anything to change that, and why does it seem appealing to you?
    --- Post Merged, Jan 23, 2016 ---
    From the story ...
    So the government is going to create an $50,000 line of credit for every child born in the U.S.? Where is this money coming from?

    Reading on ...
    --- Post Merged, Jan 23, 2016 ---
    The direct link to Jeb!'s plan: https://jeb2016.com/education-reform/?lang=en
     
  3. LizKat macrumors 68040

    LizKat

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    Thanks for the link to Jeb’s full proposal. Whew, the wonk of the Bush family speaks...

    Yeah okay this part below needs some translation besides apparently “teach to the test and then some” regarding measuring and reporting versus standards.

    Help me out here! A lot of people already don't like how Common Core works, now Jeb proposes collection and dissemination of "actionable information beyond static test scores", that should go over big with even more people.
     
  4. nbs2 macrumors 68030

    nbs2

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    Regarding the source of the money, it sounds like this would be a shift of current federally backed student loans, so there wouldn't be a complete need for new money. Since repayment would be tied to taxes, repayment would be more consistent. With our near stagnant population growth rate, those payments could (should?) eventually create a perpetual, self-sustaining, system.

    I did some analysis of student debt in Scotland 15 years ago, but my familiarity with the student loan system is primarily paying back my law school loans - point being, I pulled that view out of my backside. It makes sense to me, but is likely wrong. I leave it to those more familiar with the economics of the matter to make supportable assertions.
     
  5. thermodynamic Suspended

    thermodynamic

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    His plan sounds reasonable. What have Sanders, Trump, and Clinton said on the issue - for people coming into college or people who've gone back since the great recession started, since that was the impetus which prompted more people going back to school?
    --- Post Merged, Jan 23, 2016 ---
    There is no bubble and it won't collapse everything with a big sucking sound or boogeyman going "ooga booga". Plenty of articles go into detail as to why...

    And the money comes from loans made by banks. Doesn't matter who backs it because that's not the problem, just a symptom of a larger issue...

    I'll get the popcorn... :9
     
  6. MacAndMic macrumors 6502

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  7. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    This is ultimately the same as the current federal program but with a guaranteed fund for college for all kids and more attractive repayment options with less beaurocracy and paperwork for applications. Current program is 10-15% of income for 25 years no matter how much you pay back. It's no "free college" for everyone, but it's a reasonable step forward.
     
  8. citizenzen macrumors 65816

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    The bubble has been claimed by a number of members here in PRSI ... the OP for instance.

    From the thread, University Student Sues School for a "C" grade ...
    Likewise in a previous thread, Thank you Obama..., ZA complains about the two-tiered system of student loans vs. Pell Grants, but in the Bush plan Pell Grants are still maintained.
    So I'm curious from his stand point why he likes this proposal when it would appear to me that it doesn't solve two issues that he has complained about in the past.
     
  9. aaronvan Suspended

    aaronvan

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    Could the skyrocketing cost of tuition have anything to do with the U.S. government's student loan business?
     
  10. NT1440 macrumors G4

    NT1440

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    Sure, but the root of the problem here is that every aspect of civilization in this country has been turned into a consumer product.

    Markets are the new religion of the 21st century.
     
  11. citizenzen macrumors 65816

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    How would Bush's proposal change that?

    It appears to deepen that connection.
     
  12. Robisan macrumors 6502

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    [​IMG]
    (source)

    A Bachelor's Degree is worth approximately $550,000 NPV. Taxed at a marginal rate of 25% that returns $137,500 NPV to the US Government in additional tax revenue. So, if the government were to simply give (!) up to $100,000 (!) for college education it would still make a tidy $37,500 profit. Why, it's enough to make a GOPers head explode.

    In the meantime, instead of doing this obvious, profitable thing we instead create new, exciting, sometimes Rube Goldbergesq ways of financing education and saddling young people with debt. It's so stupid...

    ...adding, this doesn't even take into account the ancillary societal and economic benefits of discovery, innovation etc. that the educated person might contribute.
     
  13. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    This wouldn't be related to pell grants, and thus doesn't address my concern about government providing equal funding to students (the government has largely pulled out of state funding since the time when my parents went to school), it's a replacement for fafsa which is a bloated government entity which makes nonsensical evaluations on your family's ability to pay for college.

    This system addresses my prior two posts in two ways, one, the family contribution evaluation would go away, and this would have allowed me to use government loans instead of private at 8-10% interest. Two, the private student loan industry would shrivel up and die slowly.
     
  14. citizenzen macrumors 65816

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    From Jeb!'s own site ...
     
  15. aaronvan Suspended

    aaronvan

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    It wouldn't. Bush's plan preserves the incentives for universities to raise tuition rates higher and higher since the federal government still guarantees the money. The federal government should get out of the student loan business altogether.
     

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