Sunday, March 28, 2010

Mcjoan explains new student loan bill

Mcjoan (Joan McCarter), Idaho native and one of the Big Kahuna Kossacks at Daily Kos, can take a complicated subject and make it sensible. Saturday on Kos, mcjoan explained the new student loan legislation. For all of it, go to

What will the new student loan bill do for you?

If you're already paying student loans, probably not a lot. But if you're either soon needing to get loans, or to send your kids to college, it's good news. The government takeover of the federal student loan program is brilliant in it's simplicity. Thus far loan programs have been both direct loans, and federally-guaranteed loans from private lenders. The federally-guaranteed program means that the feds (us, the taxpayers) guaranteed loans made by private lenders, so the taxpayer has all the risk, and the bank makes all the profits. Now, all federal loans will be direct (the majority, 88% already are). The interest on those loans goes back to the federal government, and not to banks. All that extra money taking the remaining 12% of loans into the direct program will and not subsidizing the middle man banks goes into making college more affordable.

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