Posted by
Terry Moore on Monday, July 02, 2007 4:29:10 PM
Congress is at it again Robing Peter to Pay Paul. Ted Kennedy is in usual blind bull rush to create a larger government is trying to crush Private lenders in the Federal Family Education Loan Progam (FFELP for short.)
He wants to have the Direct Loan( the Gov.) program take over all Student Loan Lending. By cutting Lender profits, he is destroying their ability to give discounts to the people who handle their affairs well enough to earn them. Many small bank lenders have already told their Servicers they are dropping the program completely. What Kennedy doesn't tell you is that the Direct Lending is done off budget. The Fed creates the money and its just added to the deficit. That's a great way to show savings to the taxpayers, just create the money and let us pay the ugly 10( Federal Reserve Bank) interest forever. The money saved by lowering the profits of the FFELP lenders is being done to pump money into Pell grants for current students. In other words lets raise the cost(no more 1.25 or 1.5% discounts for resposible students who have graduated) and give it to the students who are currently in school. Thanks Ted, for attempting to create another bloated Federal Agency with too many cheifs and not enough Indians.