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October 31, 2011

Student loan waste

Have student loans become another government giveaway (10/27, A1, “A calculated effort”)? Years ago when we were teaching and banks handled most of the loans, the money rarely covered tuition, books and dorm expenses.

I asked several parents last week if student loan money was available to the students for other uses, and they said, “Yes, even for spring break trips.” One mother said she asked the college to quit giving her daughter so much money, and the college refused.

She said the parents can’t even be informed of their child’s loan amount because of privacy laws. That is a recipe for disaster and waste.

According to The Star, President Obama is accelerating the “Pay as You Earn” plan, whereby the cap on monthly loan payments will be lowered from 15 percent to 10 percent of a student’s discretionary income. Just what is “discretionary income?”

Student loans would be forgiven under the new plan if not repaid in 20 years (10 years for public service workers). What are “public service workers?” Perhaps politicians and community organizers? Return student loans to the private sector and reduce the waste.

Dorothy Grove
Polo, Mo.

Comments

T. Hanson

Ahh... the infamous "I was talking to someone..."
Whatever, for one the student loans I received went straight to the school. Also if your "someone" was the loan holder than yes that "someone" can see the loan that was took out and what it paid for from the school. Which in most cases it was took out at the beginning of the semester.

Here is the definitions for you by the way:

Discretionary Income - is the difference between adjusted gross income (AGI) and 150% of the federal poverty line that corresponds to your family size and the state in which you reside. (source http://www.finaid.org/loans/ibr.phtml)

Public Service workers - Public service jobs include teachers, first responders (policy, fire, EMT), public librarians, social workers, public defenders and prosecutors, and people who work for tax-exempt charitable organizations. It also includes people who work for the government and the military. (Members of Congress are not eligible.)
(Source: http://www.finaid.org/loans/ibrfaq.phtml)

 
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