Friday, October 11, 2013

Debt Ceiling And Student Loans

The Center for American Progress wrote a recent piece on why the debt ceiling debacle matters to Millennials, or at least those who might soon be student loan borrowers. If we do not raise the debt ceiling, it will be catastrophic, something that doesn't need to be rehashed here, because there is an abundance of analysis on the topic that is readily available online. However, it is worth noting what will happen to student loans for future borrowers if the debt ceiling is not raised.

Here's how the Center explained it:

If Congress fails to extend the debt ceiling, it is possible that new student loans would not be issued until the debt ceiling is increased. In the long run, the Bipartisan Student Loan Certainty Act of 2013, which Congress passed earlier this year, ties federal student loan rates to interest rates on Treasury bonds. Fortunately, current federal student loan borrowers are locked into their rates for the duration of their loan and their interest rates would not be affected by rising Treasury rates.
But if the government defaults on its debt, causing a rise in Treasury rates, student loan rates would rise for future borrowers beginning on July 1, 2014. That means hardworking students taking out new loans would be facing higher payments and exacerbating our student debt crisis.
The last point is important. It will exacerbate our student debt crisis, something that isn't even remotely on the table because our government - the faction of extremists in the GOP - is completely dysfunctional at the moment. Here's to hoping these folks get kicked out during the next election cycle. (We also desperately need to address the issue of gerrymandering). 



13 comments:

Anonymous said...

What an idiotic post, Cryn. If the federal government "defaults," then it probably won't lend money to students AT ALL - right? How exactly would that "exacerbate our student debt crisis," again?

The private sector certainly isn't making student loans any more.

You have apparently been deranged by the thought that someone might turn off the free money spigot. In the previous post, for example, you made the laughable claim that the government shutdown is somehow causing Nigerian/Spanish prisoner/debt forgiveness-type scams to appear on the internet - something, of course, that has NEVER HAPPENED until now.

Clearly you are coming unhinged over this shutdown. I wonder what your real motive might be? Judging bt your appearance, it's probably the $25 million or so in food stamps that you gobble up every month.

Anonymous said...

What an amazing analysis! Thanks. Now you may go back to sucking c*ck.

High Arka said...

Remember how, a few weeks ago, we had enough money to attack Syria? If we can afford to give CSX shipping another billion dollars to haul yet another load of heavy equipment from Texas to the Middle East, we surely could have kept the missing 17% of government "running" for at least a few more days.

Anonymous said...

They're all dysfunctional, Cryn. the GOP, the left... they're all a mess. The American people should be outraged right now that after shutting down the government and furloughing 800,000 people for 12 days, many members of congress have headed home for a break via the very FAA controllers that are working for free because of congressional actions.

I do completely agree with you though; future students absolutely CANNOT shoulder higher payments. I wouldn't be so sad though if student loans became more difficult to access. It would force universities to get real and stop charging so much for tuition. Maybe presidents of public, tax-funded universities should stop accepting million dollar annual paychecks... don't even get me started on the for profits.

Let's just all pray that these people who have been entrusted with the best interest of our nation will do what is right for the citizens for once in their careers. It may entail a raise of the debt ceiling. I don't know what is best but whatever it is, I hope they do what is right.

Bob Hertz said...

I like your work a lot. I have an article I would like you to review. How can I send it to you?

bob.hertz@frontiernet.net

thanks

Bob Hertz said...

why is it so hard to just post a comment? this is my 3rd try

bob.hertz@frontiernet.net

Cryn Johannsen said...

@Anonymous Oct 11 2013 - please read the post again. You clearly don't understand, and I am sorry for that. This is from the Center for American Progress. They along with others - including me - make it clear that this will exacerbate the crisis.

But thanks so much for your insightful remarks!

-Cryn
Author, Higher Ed, Greater Debt

Anonymous said...

To the disturbed individuals who cowardly post offensive comments on this blog:

We'd all benefit from any intelligent opinions you may have, whether or not they agree with Cryn's posts, but name calling (that I have seen in the past) and cruel, heartless insults are not only removing all credibility from your comments, they are subject to criminal consequences (see cyber bullying laws). Do not assume that posting "anonymously" allows you to be hidden from law enforcement.

If you so strongly disagree with Cryn and her blog, stop wasting your time here. While your opposing opinions can be valuable, your language has lowered you entirely as a human being. I don't agree with everything I read on this site, but I hold myself to a higher standard of behavior, even when I am behind a computer screen. It's time we all began to behave like adults.

To Cryn,

Being a reporter in the public eye, I am sure you're used to criticism but I do hope that you let absurd and untrue attacks roll off your back. You are a lovely person inside and out. Your love for the human race is evident in your work. Do not let a few socially challenged individuals harden your heart and cause you to lose faith in humanity.

Also, you should know that Blogger is not comment-friendly to mobile devices. If you could remove the word verification requirement, life would be a lot easier for those of us who read your blog using our phones. If not, I understand.

Sincerely,

Ashley Allen, M.A.
Washington, D.C.

Cryn Johannsen said...

@Anonymous Oct 11 - also, you are incorrect. The private sector IS most certainly still offering private loans. So, yeah, wrong again.

And in my previous post, the shutdown was most certainly causing a scam, and I am not the only one who wrote about it or discussed it or tried to do something about it. There were numerous groups that work on behalf of consumers that were raising the issue. As I already said, I was helping to spread the message.

Here's a recent piece on it, too:
http://www.lowcards.com/fake-sallie-mae-sites-steal-identities-16282

And here is a quote that mimics my point from that piece:

"Thieves try to take advantage of unsuspecting consumers every day, and the government shutdown presents them with yet another opportunity.

Fraudulent Instagram accounts for the student loan giant Sallie Mae are being created, offering enticing incentives to consumers who carry student debt. These accounts claim that students can wipe away their student debt due to the government shutdown. The students simply have to provide some personal information."

But thanks again for your insights!

Cryn Johannsen said...

@Ashley - thanks so very for your feedback. I will look into removing that nuisance, so you and others can freely post from mobile devices.

Actually, I am going to simply unlock the moderation configuration, and let the hate (and love) roll on in!

-Cryn

P.S. If you are ever so inclined, I'd love meeting up for coffee. I live in the area (ccrynjohannsen@gmail.com)

jasica luis said...
This comment has been removed by a blog administrator.
John Peter said...

I do fully believe you though; future students fully CANNOT shoulder higher payments

Anonymous said...

I have to pay $700/month for my loans - I dont even work in the field I went to school from because of the economy (aviation). I am in collections needless to say http://bit.ly/1diURNF