Sen Warren's bill allows Dept of Education to borrow from Federal Reserve

[tsai3904]

Student loan rates are about to rise from 3.4% to 6.8% on July 1 so there will be a lot of news to keep this rate down.

As misguided as this bill is, it's actually a good way to get people to understand and support an audit of the Fed.


Bank on Students Loan Fairness Act

The interest rate on federal subsidized Stafford loans is set to increase from 3.4 to 6.8 percent on July 1. If Congress does not act soon, millions of college students will see their student loan payments increase needlessly.

Student loan debt is a growing crisis, and it threatens our economic recovery. Outstanding student loans now total more than $1 trillion, surpassing total credit card debt. Last month, the Federal Reserve identified this mounting debt as a risk to household spending. The burden of loans keeps borrowers from buying homes, saving for retirement, and engaging in consumption that will keep our economy on the road to recovery. Keeping interest rates low is essential.

While borrowers struggle to repay their debt, the federal government is making money on its student loan programs. This year, the federal government will make $34 billion on student loans. The government even makes money on its loans to low-income students – 36 cents, on average, for student loan dollar it puts out. If Congress allows the interest rate on these loans to double, the federal government will bring in even more revenue – money that comes straight from the pockets of college students.

Some argue that it’s too expensive to keep government loans at low interest rates, but the federal government makes low-interest loans all the time – just not to everyone. Big banks can borrow money from the Federal Reserve with an interest rate of less than 1 percent. Through the Federal Reserve discount window, a bank can get a loan at a rate of about 0.75%.

The biggest banks in the country – the ones that wrecked our economy and cost millions of Americans their jobs – pay next to nothing on their debt, while students pay nine times as much.

The Bank on Students Loan Fairness Act lets students take advantage of the same low interest rates offered to banks through the Federal Reserve discount window:

- Sets Interest Rates for Government Loans to Students at the Same Level as Government Loans to Banks. The Act would provide a one-year fix to the impending interest rate hike by setting the rate for federal subsidized Stafford loans at the primary interest rate offered through the Federal Reserve discount window as of July 1, 2013.

- Funded by the Federal Reserve, Administered by the Department of Education. The Federal Reserve would make funds available to the Department of Education to make these loans. While the Federal Reserve would now provide funding, the Department of Education would continue to administer all other aspects of the federal subsidized Stafford loan program in the same manner as it currently does.

http://www.warren.senate.gov/?p=press_release&id=81

[Aratus]

interesting leverage mechanism. this stop~gap rubber banding by senior senator e. warren assumes
that the FED is more powerful than Jove + the Creator Being as it warns us another bubble has burst.

[Christian Liberty]

Government is borrowing from government... should I care?

[Aratus]

if in august of 1929 a very agitated person tells my past life "me" the big crash is on us all, should i have cared? (or am i sounding like ayn rand?)

[Aratus]

plain english. the bill is stupid. the student loan bubble is bursting. period.
how nice of senator warren to see the signs of the times! duckies, its here.

[Christian Liberty]

plain english. the bill is stupid. the student loan bubble is bursting. period.
how nice of senator warren to see the signs of the times! duckies, its here.

Luckily I won't need anything for at least my first couple years of college...

[Aratus]

in terms of the classic 1930s movie, The Wizard of Oz, picture an idealistic senator writing up a bill so we all can borrow from the big talking head
who bombastically tells us things from an empty thrown even though Toto has already pulled back the curtain that has the lil guy pulling levers.
neither the talking head nor the wimpy sheepish guy have a heck of alot of money on them. the bill tries to leverage the FED to deflate a bubble.

[asurfaholic]

Luckily I won't need anything for at least my first couple years of college...

Why do you need any college?

[Aratus]

FF is young
a degree helps
or another degree
helps on a big
resume neatly


someone who
is older can go
back to school too
so i must not
presume all

senator warren
just told me the
shit is about to hit
the fan. like the
big banking crash

[tsai3904]

plain english. the bill is stupid.

Yea it is but its great at pointing out how corrupt the Fed is by loaning the Wall St banks tremendous amounts of money at low rates. Most people don't know a thing about the Fed and this bill will at least point that out.

[asurfaholic]

FF is young
a degree helps
or another degree
helps on a big
resume neatly

I'm interested to hear what career path he is aiming for...

Personally I stayed out of college and dove right into industrial service, and make as much as my wife who went to college for 4 years to become a nurse. I made 4 years more salary than her, and didn't incur any tuition costs ( in her case she had a full scholarship, but how many people get those?)

[Christian Liberty]

I'm interested to hear what career path he is aiming for...

Personally I stayed out of college and dove right into industrial service, and make as much as my wife who went to college for 4 years to become a nurse. I made 4 years more salary than her, and didn't incur any tuition costs ( in her case she had a full scholarship, but how many people get those?)

Yeah, I want to become a social studies professor so I actually do need it:)

[asurfaholic]

Yeah, I want to become a social studies professor so I actually do need it:)

Well best of luck!

[sailingaway]

If anyone had any respect left for her, this should do away with that.

I actually think the goal is more worthy than many others we bail out, sort of like I see Social Security as being due those who paid in until the time the US doesn't pay its debts to ANYONE, and absolutely before incurring more debt.

But there is PLENTY of government spending that could be cut to achieve this, not writing a blank check for it on top of all our others, and she is one person who absolutely knows how blank a check it is. And should know that it is the connected, not the best, who will most gain from it, and not the students, in the long run, although they may get some limited benefit.

[Christian Liberty]

I actually think the goal is more worthy than many others we bail out, sort of like I see Social Security as being due those who paid in until the time the US doesn't pay its debts to ANYONE, and absolutely before incurring more debt.

Why should my generation have to pay for something the government "Contracted to" by stealing in the first place? If the mafia steals and gives to poor families, do we have to "Phase out" the theft or do we just end it? Government should default on all of its debt rather than tax my generation to pay for it.

Feel free to throw every politician not named Ron Paul* into a prison work camp to pay back as much as they can, but that's where it ends. Those who directly voted for theft are the most immediately responsible. Those who trusted thieves do bear some responsibility for that choice. But I should NOT be forced to pay them at gunpoint.

That's actually why Rand Paul's position on social securiy SUCKS, he wants to "preserve" an immoral system on my back. At least Ron Paul would get rid of it eventually (It should be done IMMEDIATELY, even though that seems heartless, government has no right to give away stolen money), Rand just wants to sustain the system on the blood, sweat, and tears of my generation, but there will still be nothing left for us (Or the next generation.) That's the nature of a ponzi scheme. People get screwed. That's not an excuse to keep delaying it.











*Hyperbole to make a point, I know Ron Paul isn't the only liberty politician out there.

[torchbearer]

FF is young
a degree helps
or another degree
helps on a big
resume neatly


someone who
is older can go
back to school too
so i must not
presume all

senator warren
just told me the
shit is about to hit
the fan. like the
big banking crash

my cousin went to vo-tech for 6 months, didn't rack up any debt, and now makes twice what i make, and has a comfortable life.
college isn't the answer for most people.

[sailingaway]

Why should my generation have to pay for something the government "Contracted to" by stealing in the first place? If the mafia steals and gives to poor families, do we have to "Phase out" the theft or do we just end it? Government should default on all of its debt rather than tax my generation to pay for it.

Feel free to throw every politician not named Ron Paul* into a prison work camp to pay back as much as they can, but that's where it ends. Those who directly voted for theft are the most immediately responsible. Those who trusted thieves do bear some responsibility for that choice. But I should NOT be forced to pay them at gunpoint.

That's actually why Rand Paul's position on social securiy SUCKS, he wants to "preserve" an immoral system on my back. At least Ron Paul would get rid of it eventually (It should be done IMMEDIATELY, even though that seems heartless, government has no right to give away stolen money), Rand just wants to sustain the system on the blood, sweat, and tears of my generation, but there will still be nothing left for us (Or the next generation.) That's the nature of a ponzi scheme. People get screwed. That's not an excuse to keep delaying it.











*Hyperbole to make a point, I know Ron Paul isn't the only liberty politician out there.

Why should anyone have to pay for 'your generation's' student loans? It isn't just to 'my generation', (not that I'd be on it for quite some time, and that time is growing into maybe never) it is to everyone who paid in. It is a debt because that was the promise when it was taken as I see it, and Ron Paul does as well. Yet congress is targeting this but incurring new spending for corporate welfare is my point. They are finding ways to cut payments to the people, but not to the connected. Ron's budget shows how much there is to cut from crony capitalism. And he didn't cut either student loans or social security or medicare in his first three years, and balanced the budget, with his approach.

However, I don't think you have a moral argument on social security to say YOU don't want to pay in and not have it be there for you, you'd rather that happen to an earlier generation. The point is the program should not exist, but once people pay for stuff, as they never did for student loans, I do see it as owing until we are speaking of bankruptcy proceedings. And in that case, all should be cut proportionately, not these cut to fund other new spending for the well connected. The real point is that regardless of how bankrupt these programs are on paper the fact is actual funds currently exist to pay for future payments, which have been collected (just not enough, eventually). And they want to use these funds for their own programs. The funds that do exist are either liquid money or are represented by the government bonds these funds invested in. Those bonds should be as good as any other bonds anyone else invested in. There is no reason imho to say they should be worth less than government bonds China or Bank of America bought.

There are different questions, how should a program be set up to begin with, how should it be unwound, and when there isn't enough money which should be priorities. I think the people are, across the board being given the last priority, whether students or those who have long funded these senior programs. Meanwhile new funds are given to new pet projects by government, constantly.

Warren's bill is an EXAMPLE of new spending while our current budget problems still have not been dealt with. It should at minimum be offset imho, from some of the endless corporate gifting by government.

[DamianTV]

So the goal is now to expand the Student Debt Bubble to include Schools themselves? Yeah, just blow the bubble even bigger before they burst it.

[sailingaway]

So the goal is now to expand the Student Debt Bubble to include Schools themselves? Yeah, just blow the bubble even bigger before they burst it.

they essentially already include the schools. The govt calls the schools to see 'what they will charge' then authorizes the debt. The sky's pretty near the limit, and the prices go up accordingly, with students having the debt of a mortgage when they graduate, without the house.

[Christian Liberty]

Why should anyone have to pay for 'your generation's' student loans? It isn't just to 'my generation', (not that I'd be on it for quite some time, and that time is growing into maybe never) it is to everyone who paid in. It is a debt because that was the promise when it was taken as I see it, and Ron Paul does as well. Yet congress is targeting this but incurring new spending for corporate welfare is my point. They are finding ways to cut payments to the people, but not to the connected. Ron's budget shows how much there is to cut from crony capitalism. And he didn't cut either student loans or social security or medicare in his first three years, and balanced the budget, with his approach.

However, I don't think you have a moral argument on social security to say YOU don't want to pay in and not have it be there for you, you'd rather that happen to an earlier generation. The point is the program should not exist, but once people pay for stuff, as they never did for student loans, I do see it as owing until we are speaking of bankruptcy proceedings. And in that case, all should be cut proportionately, not these cut to fund other new spending for the well connected. The real point is that regardless of how bankrupt these programs are on paper the fact is actual funds currently exist to pay for future payments, which have been collected (just not enough, eventually). And they want to use these funds for their own programs. The funds that do exist are either liquid money or are represented by the government bonds these funds invested in. Those bonds should be as good as any other bonds anyone else invested in. There is no reason imho to say they should be worth less than government bonds China or Bank of America bought.

There are different questions, how should a program be set up to begin with, how should it be unwound, and when there isn't enough money which should be priorities. I think the people are, across the board being given the last priority, whether students or those who have long funded these senior programs. Meanwhile new funds are given to new pet projects by government, constantly.

Warren's bill is an EXAMPLE of new spending while our current budget problems still have not been dealt with. It should at minimum be offset imho, from some of the endless corporate gifting by government.
First off, I should be clear that I used "My generation" and not "Me" for a reason. I'm trying to talk about a principle, not particular individuals.

Second of all, I never said government should do anything at all for student loans. they should get out of that busines, financial aid, exc. ASAP. And I say that as someone who has received financial aid (I strongly suspect, of course, that my education would be cheaper if that intervention didn't exist, but that's besides the point.) I'm not in the liberty movement for my self-interest, but because its what's morally right.

Thirdly, if there was already money sitting in a trust fund for those seniors, I'd agree with you. But there isn't. The only way the government can pay these people is by continuing to steal from my generation and other younger workers (Unless you would challenge the presumption that taxes are theft, if so we do need to discuss that first). So SS is really just a welfare program. So it shouldn't be maintained. In fact, even SCOTUS ruled it was a welfare program.

The bottom line is, social security is both theft and unconstitutional and so should be abolished ASAP.

Let me ask you a question, since SS is already paid for by tax dollars, HOW MUCH is it acceptable to tax to pay for it before you default?

[sailingaway]

First off, I should be clear that I used "My generation" and not "Me" for a reason. I'm trying to talk about a principle, not particular individuals.

Second of all, I never said government should do anything at all for student loans. they should get out of that busines, financial aid, exc. ASAP. And I say that as someone who has received financial aid (I strongly suspect, of course, that my education would be cheaper if that intervention didn't exist, but that's besides the point.) I'm not in the liberty movement for my self-interest, but because its what's morally right.

Thirdly, if there was already money sitting in a trust fund for those seniors, I'd agree with you. But there isn't. The only way the government can pay these people is by continuing to steal from my generation and other younger workers (Unless you would challenge the presumption that taxes are theft, if so we do need to discuss that first). So SS is really just a welfare program. So it shouldn't be maintained. In fact, even SCOTUS ruled it was a welfare program.

The bottom line is, social security is both theft and unconstitutional and so should be abolished ASAP.

Let me ask you a question, since SS is already paid for by tax dollars, HOW MUCH is it acceptable to tax to pay for it before you default?

All bonds are debt. Would you renege on all or just those for SS and Medicare?

Because taxes of some sort (tariffs, rents, whatever, money is fungible) will be paid to pay all.

And the bonds held by the SS fund exist just as the bonds held by China or every diversified portfolio in the nation exist. Why are only those targeted? I don't want to get too side tracked on SS or Medicare, I am trying to make the point that the targetting has to do with where funds DO exist. Ther ARE moneys in the medicare fund, that is where Obama stole $500 billion for for Obamacare, there ARE funds, invested in bonds, in the Social Security fund. When they talk about running out that is in a future projected date. They are going for them now, most of them, because they want to spend elsewhere.

It would make some sense to talk about 'should we tax for this debt the country owes or not' if they were trying to live within their means or at least weren't spending more. But if the tax would just go to new spending, don't you think the debts already owed to our own citizens should be prioritized over new crony projects? The priorities themselves need to be examined. I had no idea exactly how skewed they were until I read Ron's budget, then Ryans and Romney's AND OBAMA's. The NYTimes had a doodad you could play with 'where would you cut to balance the budget' but it never gave you the options to cut where Ron cut, so your conclusion was inevitably going to be to completely slash SS and or medicare and or baseline 'true poor' welfare/safety net even to balance the budget. Ron didn't find that necessary at all.

And his wasn't a full fix, eventually given the price curve on health care medicare was still going to need to be revamped, but it is one thing to say make it so there is price sensitivity so health care across the board quits going up, and to say raid it and leave in the lurch those made to depend on it through taxation of what they couldn't replace in the remainder of their working lives..... all the while you are STILL bailing out banks and education and 'green energy' and bringing millions of new people into programs not adequately funded already.

There is a point of basic management of the people's funds, once you have stolen it for their supposed good causes, as well as all the rest.

As to the specifics of social security and medicare, it doesn't matter what you or I think, much, does it?

[Natural Citizen]

Anyone seen Detroit lately? Wild dogs running the streets, trash all over the place...yeah, that debt won't ever be paid back. Detroit’s bond debt alone is a whopping $14 billion (http://www.usatoday.com/story/news/nation/2013/03/01/detroit-emergency-manager/1956975/). Worth pennies on the dollar, if that much. Why doesn’t the President divert just 2 months of the $40 billion the Fed creates every month to continue the banker bailouts? Why oh why?

[sailingaway]

Anyone seen Detroit lately? Wild dogs running the streets, trash all over the place...yeah, that debt won't ever be paid back.

A lot of debts wont be paid back, clearly. But the point is even with that staring people in the face they are spending more -- and trying to get control of pots of money where they exist. It is systematic looting, for the benefit of particular groups. I think we need to examine more the spending that is occurring and where it is going, because that is a choice. Ron may be right and we may have just passed the tipping point, since Congress seems uninterested in acting any better than they have been doing. But I think the choices being made are vivid, between different congressmen, and it is a telltale of sorts.

[cindy25]

no chance this will pass house and senate before July 1st

[HOLLYWOOD]

Anyone seen Detroit lately? Wild dogs running the streets, trash all over the place...yeah, that debt won't ever be paid back. Detroit’s bond debt alone is a whopping $14 billion (http://www.usatoday.com/story/news/nation/2013/03/01/detroit-emergency-manager/1956975/). Worth pennies on the dollar, if that much. Why doesn’t the President divert just 2 months of the $40 billion the Fed creates every month to continue the banker bailouts? Why oh why?That amazes me, because that trillion dollar ARRA stimulus crap gave Detroit almost $4 Billion.

It's proven fact, the people you LEAST want to handle/budget/spend money is government. what a waste, what a disaster

[Aratus]

i am having a bright idea... lets ask gabriel gomez and ed markey a few questions about this bill...