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College Loan Programs Fleecing You (students) and Me (taxpayer) April 14, 2007

Posted by Jordi in Business-Society Issues, Education, Government.
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Lenders Sought Edge Against U.S. in Student Loans – New York Times
President Bush’s budget reports that in 2006 for every $100 lent by private lenders, the cost to the government of subsidies, defaults and other items was $13.81, while the same amount lent through the direct loan program cost the government $3.85. The battle for dominance in the loan market has escalated as tuitions have soared and students have borrowed more

Lovely. The formula: corruption + free market ideology=fleecing of public.

Its in full swing. I want to find out if Bucknell participates in the direct loan program which allows the Federal Government to make direct loans to students. The article reports that some schools withdrew under pressure from private banks looking to force more loans their way.

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Comments»

1. Brian Mulligan - April 16, 2007

I’m really not surprised that companies would be doing this. They’re out to make a buck and they are truely “fleecing the public” for all the money they’re worth. I feel like Corporate Social Responsiblity is just out the window when it comes to students loans because college is already so incredibly expensive to begin with.

Over winter break, I had the opportunity to work at a very small public relations firm that had client named Alliance, Bernstein Invesments Inc. The financial firm specialized in for providing 501 students savings plans. Our firm did research about how parents are saving for college correctly (they spend more money on consumer electronics and vacation then college savings). They’re banking too hard on scholarships for academics and sports to pay for college and to compensate they have to take out loans.

The students then graduate from college with massive amounts of loans and debt that affect their lives after school. People would put off getting married and buying houses. The research was groundbreaking and was used to promote Alliance Bernstein Investments 501 college savings plan.

I find it very appaling that these companies are shooting to just make a buck and take money from the people looking for a good education. The public view of corporate America is already misreable with Enron, Tyco, etc. This just tarnishes their image once again.

2. Jordi - April 17, 2007

So, where are we, then? The public thinks government can’t be trusted. Corporations can’t, of course. Catholic Church? Natch. Churches in general? Better than above.

Who’s got your back?

3. Charley S - April 18, 2007

Well if you feel like going to live in the desert for 4 years and be shot at I’m sure the military would be pretty happy to pay for your school. Although instead of dealing with a lot of debt you are dealing with lots of angry people with guns, but its a tradeoff. Incidentally, I saw a survey a while ago that rated military officers to be one of the most trusted professions, over doctors and even laywers and politicians.

I think there’s a big problem with our eduaction system right now because for people who want to become doctors, you have to incur loads of debt before you even start working in a profession where you’re almost garunteed to be sued nowadays. I can only hope that people’s desire to help others will overcome the obscene amount of debt it takes to do that.


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