Obama student loan policy reaping… wait for it… $51 billion profit
May 14, 2013The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, a sum greater than the earnings of the nation’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets.
Figures made public Tuesday by the Congressional Budget Office show that the nonpartisan agency increased its 2013 fiscal year profit forecast for the Department of Education by 43 percent to $50.6 billion from its February estimate of $35.5 billion.
Exxon Mobil Corp., the nation’s most profitable company, reported $44.9 billion in net income last year. Apple Inc. recorded a $41.7 billion profit in its 2012 fiscal year, which ended in September, while Chevron Corp. reported $26.2 billion in earnings last year. JPMorgan Chase, Bank of America, Citigroup and Wells Fargo reported a combined $51.9 billion in profit last year.
The estimated increase in the Education Department’s earnings from student borrowers and their families may cause a political firestorm in Washington, where members of Congress and Obama administration officials thus far have appeared content to allow students to line government coffers.
The Education Department has generated nearly $120 billion in profit off student borrowers over the last five fiscal years, budget documents show, thanks to record relative interest rates on loans as well as the agency’s aggressive efforts to collect defaulted debt. A spokesman from the Education Department did not respond to a request for comment. A Congressional Budget Office spokesman could not be reached for comment after normal business hours.
The new profit prediction comes as Washington policymakers increasingly focus on soaring student debt levels and the record relative interest rates that borrowers pay as a potential impediment to economic growth. Regulators and officials at agencies that include the Federal Reserve, Treasury Department, Consumer Financial Protection Bureau and Federal Reserve Bank of New York have all warned that student borrowing may dampen consumption, depress the economy, limit credit creation or pose a threat to financial stability.
At $1.1 trillion, student debt eclipses all other forms of household debt, except for home mortgages. It’s also the only kind of consumer debt that has increased since the onset of the financial crisis, according to the New York Fed. Officials in Washington are worried that overly indebted student borrowers are unable to save enough to purchase a home, take out loans for new cars, start a business or save enough for their retirement.
Policymakers also are worried about the effect that high interest rates on outstanding student debt may have on the broader economy. Congress sets interest rates on federal student loans, with rates fixed on the majority of loans at 6.8 and 7.9 percent.
But as the Federal Reserve attempts to lower borrowing costs for everyone from households and small businesses to large corporations and Wall Street banks, student borrowers have not been able to benefit.
Compared to a benchmark interest rate — what the U.S. government pays to borrow for 10 years — student borrowers have never paid more, increasing the burden of their student debt as wage increases and yields on investments and bank accounts fail to keep up with the relative increase in student loan interest payments.
President Barack Obama recently asked Congress to tie federal student loan interest rates to the U.S. government’s borrowing costs. In a possible sign of congressional intent, leading Democratic senators on Tuesday proposed legislation that would keep existing interest rates on some student loans for the neediest households fixed at 3.4 percent, rather than allowing them to revert back to their original 6.8 percent rate.
The legislation, dubbed the “Student Loan Affordability Act” and proposed by Senate Majority Leader Harry Reid (D-Nev.), Sen. Patty Murray (D-Wash.), Sen. Jack Reed (D-R.I.), and Sen. Tom Harkin (D-Iowa), aims to help a small subset of future student borrowers who take out loans over the next two years. The bill does nothing for existing student debtors.
“Today’s figures from the CBO underscore the urgent need for Congress to prevent the July 1 interest rate hike and address the crushing debt placed on students,” said Tiffany Edwards, spokeswoman for Democrats on the House Education and Workforce Committee.
Rohit Chopra, the Consumer Financial Protection Bureau official overseeing the regulator’s student debt efforts, has warned policymakers to not focus solely on future borrowers.
“The whole student loan problem is a problem that should be of deep concern to this body,” said Richard Cordray, CFPB director, during testimony last month before the Senate Banking Committee. “These are young people that we should care a great deal about.”
“They’re the ones with the ambition, aspirations and dreams, and they’re getting saddled with debt that they don’t understand,” Cordray said of student borrowers. “It’s holding them back and it’s making them unable to rise and succeed and become leaders in our society.”
He added: “It’s a significant problem and we’re going to be doing everything that we can to address it at the bureau.”
The CFPB has been focusing on helping existing borrowers refinance high-rate debt or modify the terms of their loans. In a report earlier this month, the CFPB lamented that borrowers are unable to refinance their obligations after they have graduated from college and secured well-paying jobs.
“Corporate entities, homeowners, and many others have been able to refinance debt at quite low rates, and student loan borrowers are wondering why they can’t do the same,” Chopra said.
The CFPB suggests that increased concentration in the student loan market may inhibit refinancings and debt workouts. Lenders and the Education Department profit when borrowers pay higher rates than they otherwise would in a normally-functioning market.
Unlike traditional lenders, though, the Education Department’s profits are barely dented by loan defaults. For loans made in 2013 that eventually default, the department estimates it will recover between 76 cents and 82 cents on the dollar. Bankruptcy rarely discharges student debt.
The Education Department’s collection efforts are aided by loan default specialists, including NCO Group Inc., a company owned by JPMorgan.
Source: thepeoplesrecord
Yuck - A 4th Grader’s Short Documentary About School Lunch - Trailer (by maxwellproject)
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Exposing the truth about square sponge pizza.
Source: youtube.com
Connecting
“The 18 minute “Connecting” documentary is an exploration of the future of Interaction Design and User Experience from some of the industry’s thought leaders. As the role of software is catapulting forward, Interaction Design is seen to be not only increasing in importance dramatically, but also expected to play a leading role in shaping the coming “Internet of things.” Ultimately, when the digital and physical worlds become one, humans along with technology are potentially on the path to becoming a “super organism” capable of influencing and enabling a broad spectrum of new behaviors in the world.”
Source: vimeo.com
yarn:
Are you that somebody that I used to know | Aaliyah vs Gotye
this is fucking amazing.
That Timbland beat just sent Goyte’s track to the stratosphere. This is hot.
Sick.
when the Goyte track came in shit got real
Whoa. This is fire!
This was good.
son…SON.
I need dis
skeeeeen
The song as it was always meant to be.
Charles Ramsey Is an Internet Hero for All the Wrong Reasons
No one is saying that Charles Ramsey isn’t worthy of the “hero” mantle. He helped save three women who were held captive — brutally — in his Cleveland neighborhood for over a decade. But the Internet’s instant meme-ification of this man — a lower-income black man talking about a horrible crime, played on repeat at the expense of stereotypes and with the blinders fully up about the truth — it’s all a little gross, no?
Ramsey’s interview with ABC’s Cleveland affiliate is already a thing of Internet legend, not a day after it aired live on television. “You got to have some big testicles to pull this off, bro, because we see this dude every day. I mean every day,” Ramsey told a WEWS reporter at the scene Monday night. “I barbecue with this dude. We eat ribs and what not and listen to salsa music. Know where I’m coming from?” Our Adam Clark Estes predicted it: “This man’s going to be an Internet meme for sure,” he wrote.
And Internet meme he is. A second interview, with the local Fox affiliate, is making the rounds today. The name Charles Ramsey has been trending on Twitter all day. There are Vines of his expressive face being passed around. There are thumbs-up GIFs. And, of course, there are so many awful autotune mixes of the first interview already, because some people still find that funny.
Already Bradley is drawing a lot of comparisons on the Internet, and all over Twitter and Facebook, to Antoine Dodson, the Bed Intruder guy who was auto-tuned the world over, but who also happened to be a guy who was talking about the alleged rape of his sister at an Alabama housing project. Indeed, both Ramsey and Dodson are black American men who gained instant fame by way of local television interviews in which, well, neither really seemed like he’d be on television before. Those are their only similarities, but those also may, unfortunately, be the only reasons why these two men have entered the consciousness of so many white American people with a Twitter account or a couple hundred Facebook friends. That they were both connected with horror goes eerily unmentioned. “Perhaps it’s time for the world’s meme artists to stop assuming that any black dude getting interviewed on local news about a crime he helped to foil can be reduced to some catch phrase or in-joke” Miles Klee writes over at Blackbook. “It’s just baffling that we’re trying to find a way to laugh about what is, in itself, a harrowing turn of events,” Klee adds.
The Internet seems to lose sight of two very important distinctions sometimes. Charles Ramsey is a hero because he called the police and helped them save three women from reportedly being raped and impregnated in a basement for a decade. But he’s a meme because he’s black and on TV, and because so many choose to ignore the horrible realities of the crime. And, sure, pretty entertaining for a couple minutes, but we’d like to add our support to Klee’s proposal: “Just this once let’s celebrate the man himself—without using .gifs or Photoshop,” he writes. Even though we know that isn’t happening.
“Joshua Daniel White (February 11, 1914 – September 6, 1969), better known as Josh White, was an American singer, guitarist, songwriter, actor, and civil rights activist. He also recorded under the names “Pinewood Tom” and “Tippy Barton” in the 1930s.
White grew up in the Jim Crow South. During the 1920s and 1930s, he became a prominent race records artist, with a prolific output of recordings in genres includingPiedmont blues, country blues, gospel, and social protest songs. In 1931, White moved to New York, and within a decade his fame had spread widely; his repertoire expanded to include urban blues, jazz, traditional folk songs, and political protest songs. He soon was in demand as an actor on radio, Broadway, and film.
White also became the closest African-American friend and confidant to president Franklin D. Roosevelt. However, White’s anti-segregationist and international human rights political stance presented in many of his recordings and in his speeches at rallies resulted in the right-wing McCarthyites assuming him a Communist. Accordingly, from 1947 through the mid-1960s, White became caught up in the anti-Communist Red Scare, and combined with the resulting attempt to clear his name, his career was damaged.
White’s musical style influenced many future generations of musical artists, including Blind Boy Fuller, Brownie McGhee, Pete Seeger, Lena Horne, Nat King Cole, Harry Belafonte, Lonnie Donegan, Eartha Kitt, Alexis Korner, Odetta, Elvis Presley, The Kingston Trio, the Clancy Brothers and Tommy Makem, Merle Travis, Dave Van Ronk, Peter, Paul and Mary, Bob Dylan, Eric Weissberg, Judy Collins, Mike Bloomfield, Danny Kalb,Roger McGuinn, David Crosby, Richie Havens, Don McLean, Roy Harper, Ry Cooder, John Fogerty, Eva Cassidy and Jack White.”
Source: Spotify
“The Walking (And Talking) Dead” — A Bad Lip Reading of The Walking Dead (by BadLipReading)
Source: youtube.com
For all #MadMen fans, I present ‘80s Don Draper’. He comes equipped with such wisdom nuggets like:
- People want a dance that makes them feel safe. They’ll do anything for it, even leave their friends behind.
- The hippos eat marble after marble, but are never satisfied. That’s America.
- Either buy this doll, or it will die in a cabbage patch. That’s the threat we’re selling.
- They’re not A Team. They’re THE Team.
- The sooner you realize this is a post-Paula Abdul world, the sooner we can sell some Casios.
And my personal favorite:
People don’t want to avoid the Noid. They want to be him.
