Word: loan
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...face, it would seem to be a gift to Barack Obama's conservative critics, who have spent the summer painting the new Democratic President as a socialist who is eager to nationalize the entire health-care system. After all, the Administration's proposal to restructure the student-loan industry is, in many respects, much closer to an actual government takeover than its relatively tame market-driven health-reform plan. But as the House holds hearings and looks likely to pass a student-loan bill this week, it's clear that the education overhaul is not going to be the high...
...only last spring when Obama made clear that he was expecting a fight over the biggest change in the federal student-loan program since its 1965 creation. "The banks and the lenders who have reaped a windfall ... have mobilized an army of lobbyists to try to keep things the way they are," he said in April. "They are gearing up for battle. So am I." (See the 10 greatest speeches of all time...
Educational institutions currently have two ways to offer federal loans to students. In the Federal Family Education Loan (FFEL, pronounced "fell") program, the government pays subsidies to banks and lenders to dole out money to borrowers and reimburses companies up to 97% of the cost of any loan that is not paid back. The second way is the direct-loan program, created in 1993 as an alternate option, in which the government cuts out the middle man, lends money directly and gets all the profits. If the Student Aid and Fiscal Responsibility Act (SAFRA) passes both houses of Congress...
...health-care debate would seem to help critics of the student-loan plan, who have no qualms about trying to link the two. "One of the points we're making is that the parallels to the health-care debate are really eerie," says Marrero. "The direct-loan program was created as a public option 16 years ago. It was touted as a form of competition that would encourage innovation and keep the industry honest. Sound familiar?" But rather than fuel significant opposition to the student-loan plan, the health-care firestorm has overshadowed it, making it harder for opponents...
...Merkel's government announced it would bankroll the Magna bid in May, pledging $2.1 billion as a bridge loan to keep Opel afloat, as well as $4 billion in future loan guarantees. The German government also made it clear it wouldn't stump cash for any other bidder. Some politicians accused Merkel of "blackmail" and warned that her government's support for Magna could backfire. Initially, GM had serious reservations about Magna's offer and seemed to favor a rival bid by the Belgian-based investor, RHJ International. One GM official said RHJ's offer was "simple and elegant...