Education

More News | |

Government likely to take over student loans

  • Follow Government

Health care isn't the only area the federal government is looking to reform. Student loans also are being targeted.

Back | Next
Augusta State financial aid worker LaChrista Brown (left) assists freshman Gabriel Medo. Medo said he is "optimistically cautious" about a likely government takeover of student loans. 
  PRESTON SPARKS/STAFF
PRESTON SPARKS/STAFF
Augusta State financial aid worker LaChrista Brown (left) assists freshman Gabriel Medo. Medo said he is "optimistically cautious" about a likely government takeover of student loans.

"I'm thinking that since it's part of the health care package, I don't think the public is aware," Augusta State University's financial aid director, Willene Holmes, said Tuesday, noting that she hasn't received calls from students or parents about the new federal government plan, which would replace students' private lender options after July 1. The plan is part of the health care legislation the U.S. House of Representatives passed Sunday.

"All indications are the private lenders as we know them, all of them are going to be out of the (student loan) business," she added.

Holmes said that in the next week she'll notify students that if they applied for a loan for next fall they'll likely be going through the new federal government direct loan program instead of a bank.

The Senate will take up the proposed change next week, and approval is expected because only a simple majority vote is needed, The Associated Press reports.

The measure essentially would end government subsidies to private lenders and use that money instead for the government's own loan program and to provide $36 billion in new spending for Pell grants, which are offered to the neediest students.

"So that's a good thing," Holmes said of the added Pell funds.

Holmes said that those who have received private lender student loans in the past will continue to pay on them but would go through the government in future semesters. In some cases, she said, the federal government has already started purchasing private lender loans, meaning the student would start paying the government instead.

Holmes said it's still too early to tell whether the student loan reform will mean a smoother approval process or provide loans for more students, but she said it's intended to make borrowing more affordable for students.

ASU junior Whitley Price, who works in ASU's financial aid office and has applied for a student loan for the fall, said she thinks the government would be more likely to help students than a bank.

"I personally think it's a good thing," she said.

Holmes said she has just one worry -- whether the government will continue offering the financial seminars and credit-counseling sessions that private lenders have conducted each year for ASU students.

"I'm concerned about that because those seminars really help out students a lot," she said.

America's Student Loan Providers, which represents many of the leading financial organizations that offer student loans, says on its Web site that most seminar services would cease under the government plan.

The group also argues that a federal government takeover would eliminate consumer choice and eliminate thousands of jobs in institutions that now provide student loans.

Got a question?

- Augusta State University students and parents who want more information about the likely federal government takeover of the student loan program can call the university's financial aid office at (706) 737-1431.

- Augusta Technical College officials say they don't offer student loans that would be affected by the change.

- Messages left with Paine College's financial aid office weren't immediately returned Tuesday.

Comments (15) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
Runner46
0
Points
Runner46 03/24/10 - 07:01 am
0
0
Keep an eye on this one,

Keep an eye on this one, because this effects our sons and daughters. The federal government is in bed with the La Raza (NCLR) group, a pro-illegal alien organization. The feds will give money to anyone, including illegal aliens. College assistance should be for U.S. citizens only, because it's U.S. citizens who are being taxed to pay for it!

55 F-100
1
Points
55 F-100 03/24/10 - 08:38 am
0
0
You are exactly right,

You are exactly right, Runner46, this tactic is a "vote buying" ploy as Prezbhojangles attempts to curry the favor of the illegal aliens prior to his attempt for general amnesty for these law-breakers. We must fight against this with all our might before the muslim marxist takes away all of our liberties.

55 F-100
1
Points
55 F-100 03/24/10 - 08:38 am
0
0
You are exactly right,

You are exactly right, Runner46, this tactic is a "vote buying" ploy as Prezbhojangles attempts to curry the favor of the illegal aliens prior to his attempt for general amnesty for these law-breakers. We must fight against this with all our might before the muslim marxist takes away all of our liberties.

wordwright
134
Points
wordwright 03/24/10 - 09:37 am
0
0
I don't have a problem with

I don't have a problem with the government taking over the student loans. Too many private lenders have taken advantage of students' inexperience by charging high fees and interest rates.

However, the Pell Grant program needs a revision. Students can fail for three semesters in a row before they lose their financial aid. Students who are failing at mid-term of their first semester should receive counseling. Also, students who earn straight Fs during any semester should be required to sit out a semester immediately rather after three semesters. A wake-up call is better sooner than later.

Also, recipients of Pell and other government subsidized funds should be required to perform at least 10 hours of community service per week. They would learn valuable lessons in personal responsibility, while also learning how to work with others. If they don't complete the service, they don't receive a grant.

jack
11
Points
jack 03/24/10 - 10:19 am
0
0
You posters and ddthe ASU

You posters and ddthe ASU financial assistance officer evidently didn't hear Lindsey Grahamnesty's break down of this take over of another private enterprise. The interest rates for student loans will rise and cost student borrowers about $1500 more dollars that will go to the federal gov't for more money they can waste/buy votes with. Current loan rate with the banks is about 4.5 percent. With the gov't, it will rise to over 6.5 percent per Sen. Grahamnesty.Due to the requirment that young people buy health insurance they don't wont andnow higher student loans payments, I believe you will see the reverse of the young folks who voted for BimbObama in November when they vote Republican.

jack
11
Points
jack 03/24/10 - 10:21 am
0
0
Steve, when they take over

Steve, when they take over the toilet paper insudtry,I hope they put BimbObama's picture on it rather than any of our money.

wordwright
134
Points
wordwright 03/24/10 - 12:38 pm
0
0
I don't need Lindsey Graham

I don't need Lindsey Graham or any other politician--democrat, republican or otherwise--to interpret for me. I do my own research and make my decisions based on my findings.

I know the facts about student loans from firsthand experience. Jack, I don't know where you got your interest rates from, but private rates vary considerably. So far, I have not seen any rates as low as the one you quoted for banks.

If you will read my previous post, you will see that students are being taken advantage of by private lenders. Most private lenders have higher interest rates and fees than the government rates. Some schools have already excluded students' access to private lenders because they were being ripped off by private lenders. I'm sorry, but I do not believe that private industry is the god that most people think it is. Likewise, I do not think that government is the end all be all. We need a balance.

As for the comment about health insurance--most students are covered by their parents' health insurance, so they don't have to buy insurance.

SteveCagle
12
Points
SteveCagle 03/24/10 - 12:56 pm
0
0
Wonderful, my comment got

Wonderful, my comment got removed...I LOVE censorship! thanks for the email reminding me to mind my Ps and Qs because the gubment said the A word is not appropriate. THANKS BIG BROTHER

Chillen
17
Points
Chillen 03/24/10 - 02:10 pm
0
0
Cradle to Grave government

Cradle to Grave government control & care. Freedom as we "knew" it is slipping away.

BCG
0
Points
BCG 03/24/10 - 05:08 pm
0
0
Chillen you are so right ...

Chillen you are so right ... freedom is going, going and gone, if those of us who love our country as the free consitutional union that it is meant to be don't wake up and take a stand instead of letting others do it for us. We all count and don't let the liberal media and the freeloaders beat you down so that you give in as a good little one!! I will not give in and I will not let name calling offend; I will let my voice be heard at the ballot box as will I encourage my voting age children to do the same. Don't let them divide and conquer let's join together and win!!!

BCG
0
Points
BCG 03/24/10 - 05:19 pm
0
0
Oh by the way some colleges

Oh by the way some colleges have already given in to the Government. I got my letter about my child's loans last week. No options other than government loans even if I have been happy with our private provider for several years now. Please all of you out there please help us stop this government take over. Elected officals should be respectful of the public opinion who elected them. Also term LIMITS!!!!! RULE

SteveCagle
12
Points
SteveCagle 03/24/10 - 06:42 pm
0
0
Censored again. That's twice

Censored again. That's twice on the same article. Little sensitive are we Chronicle staff?

corgimom
38742
Points
corgimom 03/24/10 - 07:52 pm
0
0
All colleges have

All colleges have international students. That isn't the problem.

You want to blame somebody for this? Blame the millions of people that took out student loans but "can't afford" to pay them back- but have cell phones, cable tv, dines out, goes on vacation, has money for clothes, etc. Student loans have a terrible default rate.

At least this way the Federal government can get its money back through garnishments of tax returns.

Cadence
219
Points
Cadence 03/24/10 - 11:11 pm
0
0
I just don't understand why

I just don't understand why it was combined with the health care takeover? Student loans are not health care.

dickworth1
954
Points
dickworth1 03/25/10 - 02:56 am
0
0
Some people just don't get
Unpublished

Some people just don't get it! Anytime the U.S. government is involved
with any kind of business or trying to fix things that are not broken, beware, this is government takeover! Citizens need to get over the idea
that the government is going to fix everything, Red china and the rest of
the communist world does this and you have no input what the government does or what policies they choose. Beware comrades!

Back to Top
loading...
Top headlines

City inspectors look to demolish Goodale House

Rob Sherman, director of Augusta's License and Inspection Department, said his staff plans to ask a State Court judge in early 2015 to order the endangered property, which was built in 1799 and is ...
Search Augusta jobs