Yes, in an article appearing in Insidearm.com recently,
Elizabeth Warren has introduced a bill with no cosponsors in which the rates
charged by the
Federal Government for student loans would be set to the same rate
charged to banks when banks borrow money from the Fed. The bill is Senator Warrens attempt to preempt the Increase in interest charged on student loans beginning in July of 2013.
Essentially the bill would allow students to borrow at the same rate now enjoyed by the banks when they borrow money from the Federal Reserve, which is as of this writing essentially 0.75%.
Average interest rates currently on Federal student loans is 3.4%, but is expected to rise to 6.8% come July 1st. It goes like this, when banks borrow money to lend to the consumer they get the money at .75%, but make a very tidy profit, depending on what exactly they charge in interest. It should be noted here that in 2010 banks were essentially taken out of the student loan business as they were federalized and brought under the Dep’t of Education in 2010.
It is anticipated that the federal Government will bring in about 37 Billion dollars in profit next year on student loans, as things now stand. It is interesting to note that last year when Congress was faced with this same issue it elected to put the matter off to this year, and here we are.
So with all this as background, it is interesting to
note the actual comments
made to the original story when it first appeared in Insidearm.com.
As it is, the Feds under the Dep’t of Education now
offer many debt relief
programs for students struggling under the burden of payments they cannot afford regarding student loan payments.
You know. Johnny got the degree, but now cannot get a job, and has the student loan to pay back. He has used up all his deferments and the defaulted student loans are causing some problems. What sort of problems you ask? Well, for one thing, if Johnny wants to now work for the Federal Government, then he has to get his loans under control, because in the Federal work arena they are somewhat touchy about having debts you are not dealing with. If you are in the Military, chances are you will not be promoted if you are just ignoring your debts. Additionally, going back to school to advance your education, on a student loan, is pretty much not going to happen, until you correct any default on your current student loans.
The idea that every American is somehow entitled to a
of his or hers choice is a topic for another article.
Now back to what I started to say about the comments on this article.
Here is one of them: (name withheld) you are out of touch on student loans. Most students will never pay back their loans for one reason or other.
(Another: (name withheld) “Mike, you are out of touch on student loans.”
Of course I then realized that these comments are posted by debt collectors, because, except for myself, that’s you reads this publication. They are already not very happy that they cannot collect in Student loans as of 2010.
But here is the real bottom line. If you are saddled with a student loan and cannot afford to make the current payments, there are many programs now available through the Dep’t of Education which can lower the payment, and even in some cases make the payment on the interest due on the loan and reevaluate your situation each year.
I am a
credit counselor, that is my only interest here, and that is to help you live
a debt free life, and so that is my sole purpose for writing this article. So if you are stuck in a debt situation and need help, whether it is student loans or another type of debt, please feel free to use one of the phone numbers and links below for a free credit counseling session, over the phone and see what your options are, because there are always options, and make it happen for yourself, because no one can do it for you.
Free Credit Counseling--- 877-766-2465
Student Loan Consolidation---877-766-2465
Free Ch 7 Bankruptcy Counseling-- 516-204-4640 (National Number)
Credit Restoration Counseling-888-586-2661 - Credit Report Review
Each of these numbers provides Free Counseling.
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