Student loan auction proposal stirs opposition

Tumbleweed · Black Ops Joined: 02 Jul 2007 Posts: 3687 votes: 3

This might be an upcoming battle between the Democrats and Bush.

By Kevin Drawbaugh

WASHINGTON (Reuters) - A proposal to test a radical change in the U.S. student loan industry by putting it on the auction block is set to pit Democratic lawmakers against the Bush administration and the banking industry.

As Congress returns this week from its summer recess and gets back to work cleaning up the troubled $85-billion business, one proposal would set up a test requiring lenders to bid competitively for the right to issue loans.

That would dramatically change the current system and some in the industry are attacking the proposal as "unworkable."

"The auction proposals ... create unacceptable levels of uncertainty for lenders and schools alike," said four industry lobbying groups, including the National Council of Higher Education Loan Programs, in a letter last month to lawmakers.

Another industry coalition said earlier in August that legislation "would impose unworkable, untried auction systems on parent borrowers and schools."

Both the Senate and the House of Representatives have passed bills recommending auction pilot programs, as well as other reforms for an industry embarrassed this year by scandals involving kickback schemes and conflicts of interest.

Congressional negotiators are preparing to hammer out a final version of the bill to send to President George W. Bush.

A House bill passed on July 11 calls for a federal study of different auction options, a recommendation on the best option and then a real-world test of it.

A Senate bill passed just days later would mandate the prompt launching of a pilot program to auction off rights to issue federal PLUS loans to students' parents.

The administration has threatened to veto the House bill, mainly because the White House wants more funding for student grants and less emphasis on lowering student-loan interest rates.
Source
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CHUQ · Posted: Fri Sep 07, 2007 2:44 am Post subject:

I wisjh I had somethging clever to say, other than, education should be a right not a priviledge and shpould not be used to help financial services screw people.
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Tumbleweed · Black Ops Joined: 02 Jul 2007 Posts: 3687 votes: 3

The government want's to outsource the loan aspect of the program and we know what happen when that takes place. Laughing

_________________
To argue with a person who has renounced the use of reason is like administering medicine to the dead.
Thomas Paine

It's impossible to be an effective leader of a country when everyone thinks you are stupid.

sglaine · NSA Joined: 03 Jul 2007 Posts: 123 votes: 1

Here is how I see it..Education is so expencive..Avarge studant book is a $120 and all of the other crap that goes along with it ..Yup expencive to go and drink beer like a fish for 4 years. LOL. Damn and those kids never get out of there college debt.