Thank you, Mr. President

So, I went to go pay my student loans today and I saw this message on the screen:

“If you are applying for a Stafford or PLUS loan and the loan is for an academic term that will begin on or after July 1, 2010, you should contact the financial aid office at your school or the school your dependent student is attending.

– Legislation passed that eliminated the Federal Family Education Loan Program (FFELP) and requires all student loans to be disbursed by the Federal Government through the Federal Direct Loan Program (FDLP) effective for any loan first disbursed on/or after July 1, 2010.

– If you apply for a PLUS loan another credit check will be completed through FDLP. Multiple credit checks may adversely impact your consumer credit rating.”

Now, this of course doesn’t affect me. I’m not applying for a new loan. On behalf of all college and graduate students out there, I just want to thank the POTUS for authorizing the government to take control of the student loan industry so promptly. Because, the student loan industry really needs the government to intervene. The madness had to be stopped some how, some way.

Did I miss the headline somewhere? Was the financial industry in so much calamity that lenders of student loans were such demons that the saintly federal government had to step in and free those who are being oppressed?

I’m lost on this one, folks. Absolutely lost on this part of the bailout plan.

5 thoughts on “Thank you, Mr. President

  1. Translation:

    (1) Interest rates are set to climb like an F-15 in full afterburner.

    (2) Compounding matters, investors are getting wary of investing in these types of bonds.

    (3) This would adversely impact the flow of student loan dollars. This would have an adverse effect on the pucker factors of university administrators.

    (4) The government, being in bed with academia–and facing the potential wrath of a whole mother lode of pissed-off students who (a) can’t get jobs and (b) can’t get student loans–is trying their damndest to keep the student loan dollars flowing.

    (5) What government has not figured out is how they can guarantee that they can keep the money flowing at the lower rates.

    After all, as Denninger often points out, cash flow always wins.

  2. I thought the nationalization of the student loan program was part of the health care bill, not the bailout. That leads me to wonder what else is in the bill.

  3. The cash profit from this is one of the tricks they used to “keep the cost of health care affordable”.

    No debate in the congress, just pass it in the middle of the m\night as part of a huge bill that is also not wanted by most Americans.

  4. @Professor Hale

    The cash profit from this is one of the tricks they used to “keep the cost of health care affordable”.

    If our Congress was thinking that way, then they are making a pretty huge-ass assumption regarding “profits”. Right now, 10-year Treasurys are in the same risk category as comparable corporate bonds. This move will only make Treasurys riskier, as this is going to jack up the debt even more.

    Rather than “guaranteeing” privately-issued student loans–which was already too risky–they are now going to be issuing AND guaranteeing the loans.

    I guess they’ll buy swaps with a sister agency–AIG–to protect their risk. LOL

  5. gotta love all these seedy idiots. twill be funny – haha – when the lights come on and the party’s over and who’s in bed w/whom is suddenly revealed … b/c, not a one of em is in bed by themselves! ohhh, no.

    it’s a good thing God is God, b/c i cannot imagine having to keep up w/all this filth. i just know there’s a long and distinguished list of those whom i do not care to be anywhere near when they meet their judgement day.

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