Poor bankers. Just as they’re catching flak for everything from the global financial crisis to high credit card interest rates, along comes the president and adds another grievance. Barack Obama, it seems, thinks using banks to dole out federal college loan funds is a waste of taxpayer money. So on Friday he discussed his scheme to boost the flow of federal dollars to those looking to get a higher education. To pay for it, he said, “we’re going to eliminate waste, reduce inefficiency and cut what we don’t need to pay for what we do.” Look out banks. Obama said there are two kinds of federal education loans — direct loans and Federal Family Education Loans. Under direct loans, tax dollars go directly to help students pay for tuition, “not to pad the profits of private lenders,” he said. But under the FFEL program, “taxpayers are paying banks a premium to act as middlemen — a premium that costs the American people billions of dollars each year,” he added.The loans are federally backed, so the banks don’t even have to take on significant risk. Cutting out the middleman, Obama said, could save the government tens of billions of dollars that it could use to help more students. But making that change won’t be easy, he said. ”The banks and the lenders who have reaped a windfall from these subsidies have mobilized an army of lobbyists to try to keep things the way they are.” ”They are gearing up for battle. So am I,” Obama said. “For those who care about America’s future, this is a battle we can’t afford to lose. For more Reuters political news, click here.Photo credit: Reuters/Larry Downing (President Obama discusses federal education programs in front of a portrait of George Washington)
Tales from the Trail
WASHINGTON – Democratic presidential hopeful Barack Obama may be in the lead in the polls, but he’s leaving little to chance especially among younger voters.
He went on MTV to answer questions from young voters ranging from student loans and taxes to gay marriage and whether ordinances should be passed prohibiting sagging pants — yes sagging pants.
“I think people passing a law against people wearing sagging pants is a waste of time. We should be focused on creating jobs, improving our schools, health care, dealing with the war in Iraq,” Obama said.
FAYETTEVILLE, N.C. – Say goodbye to the FAFSA form if Hillary Clinton is elected president.
Reducing student loan paperwork may not qualify as a marquee issue like ending the Iraq war and establishing a universal health-care system. But it’s one way Clinton can portray herself as a detail-oriented policy wonk who will make voters’ lives easier.
While her rival Barack Obama delivers a broad message of hope and change, Clinton’s speeches are so laden with specifics you can almost see the bullet points.