Word: student
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Dates: during 2000-2009
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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...
...could have a hard time in the Senate, where the Administration will need to cobble together 60 votes to prevent the threat of a filibuster. And those in the loan industry certainly aren't giving up. "Ultimately, what they are trying to create here is the Post Office of student lending - you've got no choice," says Jack Remondi, vice chairman and CFO of Sallie Mae, the nation's largest lender, referring to Obama's Aug. 11 comments that questioned the efficiency of American letter carriers. "And this is the President's initiative on health care: if you create competition...
...Nelson of Nebraska, have opposed the measure for that reason. But the Department of Education (which would run the new and expanded program) maintains that because Sallie Mae and several other companies would be kept on as contractors to "service" the loans - performing administrative tasks such as answering student inquiries and collecting payments - the total amount of jobs lost will actually be much less. It doesn't hurt the Administration's case that over a year ago, when the credit crunch paralyzed the markets, Congress had to pass a law allowing the Department of Education to buy student loans back...
...someone who actually has to throw that switch, I can tell you that there's a bunch more switches behind that one that you don't even see. It's not that simple." Still, for an Administration that fully expected a knock-down, drag-out fight over the student-loan plan, those kinds of problems probably seem pretty easy to solve...