Texas Insider

1:46 pm CST - September 17, 2009

U.S. House Votes to Kill Choice on Student Loans

Carter, Conaway: If approved by Senate, federal takeover of student loan industry allowed

(WASHINGTON, DC) – College students will no longer have a choice on where to obtain their student loans if a bill passed today by the House of Representatives becomes law. Democrats voted overwhelming to approve the bill. The legislation elminates the private lender option by June of next year.The House today voted down party lines to approve H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009 sponsored by Rep. George Miller (D-CA), which strips students of the ability to choose private lenders under the Federal Family Education Loan Program (FFELP) over the Federal Direct Lending Program (FDLP).

“The public-private student loan program that has been in place since 1965 has provided funding for over 60 million Americans to attend college,” says Congressman John Carter (R-TX). “To answer success like that by voting to destroy the system makes no sense for students or higher education.”

The Federal Family Education Loan Program (FFELP) last year alone provided college loans for 6.4 million students at 5,000 schools, and has been the overwhelming student loan program of choice for colleges and students, especially among Texas schools and students.

Today’s vote, if allowed to stand, allows a total federal government takeover of the student loan industry.

It is estimated to cost taxpayers up to $50.1 billion over ten years, when taking into account the market-risk of inevitable defaults, which Democrats left out of their scoring on the bill.

The bill is also estimated to eliminate 30,000 jobs nationwide.

Carter says the economic impact in Central Texas will be especially damaging.

“In my district alone, this would directly eliminate over 1,000 jobs, not to mention all the bankers and spin-off businesses that would be negatively affected. After speaking personally with these folks, I know firsthand that many of these employees are the wives of soldiers at Ft. Hood, the last people we would want to hurt while so many of their spouses are deployed overseas protecting our country.”

“If this becomes law, it should be one of the first laws to be repealed by a new Congress in January 2011,” says Carter.

“And it should be a big reason for students and parents across America to make sure that Congress is indeed new,” Carter added.

Congressman Mike Conaway (R-TX-11) also blasted the “Student Aid and Fiscal Responsibility Act of 2009″, making the following statement after voting ‘no’ on H.R. 3221:

“I am highly disappointed with my colleagues across the aisle for passing yet another piece of legislation that bloats our federal government. Today, the House voted to abolish the successful and well-respected Federal Family Education Loan (FFEL) student loan program and replace it with a system of government-run lending directly from the United States Treasury.

“Over the past forty years, the Federal Family Education Loan program has provided over 200 million loans and the opportunity for countless young men and women to seek higher education. These services are delivered at very little cost to families struggling to provide their children with a college education. This government-run lending program will be bad for students, bad for schools and bad for American jobs. It will add layers of bureaucratic red-tape while providing only the minimum in services to students and their families.

“The Democrats claim that this student loan bill “saves” $7.8 billion” over ten years; but once the bill’s budget gimmicks are accounted for, the cost is actually $50.1 billion. This bill has the potential to eliminate over 30,000 jobs in the private sector and creates ten new mandatory federal programs.

“The parallels between this takeover of our student loan system and the Democrats’ plan for a government takeover of our health care system are staggering, and I simply could not support this bad bill.”

9 Comments

CWJensen
3:38 pm CST
September 17, 2009

For the information of all that care ………………………….I drove 160 miles a day carried 18-21 credits per quarter worked 40 hours a week maintained a 4.0 gpa all without student loans or any other assistance my senior year in college……………………………..all student loans and parents that think they owe their children a college education has done is create a generation of what have you done for me lately adults and inflated tuition costs.
BTW……..my children all worked their way through college and are better for it.

a dumas
7:34 pm CST
September 17, 2009

I respectfully disagree, CW. Cosigning a loan for children to attend college does not create a generation of lazy bastards. Parents who failed to instill proper values in their children are to blame for any such outcome. Simply making children does not necessarily qualify a person to raise them.

And its not just a case of parents spoiling their children. After graduation, before day one of a new career, many students are saddled with debts of $60,000 or more. It takes them years, sometimes decades, to pay these loans off.

As commendable as it is that you were able to put yourself thru school, student loans are a necessity to many students, who would not be able to attend college without financial assistance.

I see no reason for House Democrats to attempt this grab of power other than to steer the next generation of borrowers toward their favored financial institutions, in order to insure a “fair share” of kickbacks and “campaign contributions”. The stench of Hope and Change is heavy.

That being said, I believe the generation you refer to as the “what have you done for me lately adults” are otherwise known as “Liberals”, for whom I can offer no excuse.

CWJensen
8:50 pm CST
September 17, 2009

a dumas…………………….DO NOT ASSIGN the term lazy bastards to me as I did NOT use it.
You want to use it claim credit for it.
Student loans ARE NOT a necessity for any one…………………………….you may NOT go to the college you would like to…………………..it make take you LONGER to graduate while you WORK your way through school……………………..you may spend time in the MILITARY to make college possible…..you may have to work a few years to save the money before college BUT it is certainly possible.

Of Course you probably know all that since you think you understand responsibility and parenting.

If you read carefully I not only worked my way through college but all 7 children did.
And as I said they are better for it.

Student loans are guaranteed by taxpayers and defaults are a direct cost to taxpayers no matter which party is trying to get your vote by luring you to the public trough and convincing you that without their program YOU COULD NOT SURVIVE.

linda
9:48 pm CST
September 17, 2009

The part of this news today did not really affect me one way or the other, loans or work way through….you are either working thru college, or before, or you are paying later if you do it by a loan…..THE THING in this news that caught my attention was, the administration flunkies were saying it would save some enormous amount of money IF THEY COULD BE THE ONES TO HANDLE THOSE LOANS INSTEAD OF THE STUDENTS WHO FEEL THEY WANT THAT ROUTE.

I guess it never occured to this administration that if that money is saved, there is no need to spend the difference as they said, on renovations/enlargement of community colleges and some other thing for the dependent folks…..could we just APPLY THAT SAVINGS AND ALL OTHER SAVINGS TO OUR NATIONAL DEBT….AND STOP SPENDING, until there is progress there…..this debt is going to end up owining America……and these wise a$$e$ in D.C. have one gear, SPEND!

SJK
11:07 pm CST
September 17, 2009

I heard that the student loans by the government to these young people will be paid back by I think it was 10 years of service to the government! That alone would deter me from wanting any of my family or friends from getting a government loan for any of my family or friends college age kids! This is Obama’s agenda and takeover at work!

CAW
7:37 am CST
September 17, 2009

The thing that gets me about all this is that students won’t have a choice about where to get their student loans. Sure, there might be some bad options out there, and private lenders might be making some money, but who said there’s something wrong with a business making money? It’s very easy for a student (or his/her parents, if they’re paying the loan) to shop around and go for the best rates. Now, you’ll just get whatever rate the government tells you.

Dawn
7:43 am CST
September 17, 2009

WOW! Several months ago I heard about this bill and I was appaulled back then. This time as I read through this tidbit of information is…. What the world! Is this just another way to get everyone riled up and get their time invested to turn our heads from whatever the Gov’t wants to pass that we aren’t aware of? There must be more to this bill than we are seeing. This just can’t be the be all end all?

SJK
7:45 am CST
September 17, 2009

This is all about Obama getting hie Civilian Army! This has been his plan all along! It is his government takeover! Check out what they are doing to the kid’s education throughout all their years in school!

Gary Crittenden
11:28 pm CST
September 17, 2009

Don’t forget that the de-funding off acorn is tied to this bill—