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Student Associations Lobby for Bill to Revamp Student Loans (Page 1 of 2)
Student governments and organizations at colleges and universities nationwide are pushing lawmakers to pass legislation that supporters say will make acquiring a higher education more accessible and affordable.
The legislative measure, known as the Student Aid and Fiscal Responsibility Act (SAFRA), was passed by the House of Representatives on Sept. 17 in a vote of 253 to 171, largely along party lines. All but four Democrats voted for the bill, and only six Republicans also voted in favor. The bill is expected to be put to a vote on the Senate floor on Oct. 15.
The bill, if passed, would essentially mean an overhaul of the current college financial aid system, eliminating one of the two existing national programs that provides students and parents with federal college loans.
This landmark legislation would shut down the long-standing Federal Family Education Loan Program (FFELP), which issues federally guaranteed student loans to borrowers via banks, state organizations, and other private lenders. The government currently pays these private FFELP lenders a subsidy for the federal parent and student loans these lenders issue.
Under the SAFRA bill, all federal student loans would be issued through the second national student loan program, the Federal Direct Student Loan Program, which issues federal college loans directly to borrowers through the U.S. Department of Education, with no third-party involvement from a bank or other FFELP lender and thus with no government subsidies being paid to a middleman.
SAFRA supporters, which include many college student organizations, say that ending government subsidies to third-party FFELP lenders to originate federal student loans will save taxpayers $87 billion over the next decade which means more funds available for federal college grants and other higher education initiatives.
“FFELP is expensive for the government,” Kathleen Templin, president of the Associated Students of Northern Arizona University, told the NAU online newspaper, JackCentral. “They give money to banks, which in turn gives money to students. But because banks charge interest rates, the government pays a lot of money for lenders to give money out” (“Student Aid Act Passes in U.S. House, Due for Senate,” JackCentral.com, Sept. 24, 2009).
In fact, SAFRA allocates $40 billion of the projected $87 billion in savings to expand the Federal Pell Grant program, which targets low-income students.
Students Applaud Expansion of Federal Pell Grants
Several student governments from across the country have joined forces with the United States Student Association (USSA), the main voice for students on Capitol Hill, to organize meetings with legislators to press the importance of financing higher education in building a better American work force.
“A lot of students are not able to go to school because of funding,” said Teresa Mabry, the chair for the Women of Color Caucus on the USSA board of directors. “If were not getting [our message] out there, its not going to work.”
Know when to get a home loan modification
If life is throwing you lemons and it’s hard to make lemonade, especially when that lemonade is your livelihood,then you need to step back and look at what is going on. 9.2% of Americans today are unemployed. 23% of Americans are “underwater” in their homes. 5.3 million homes in America are in foreclosure.
Lets face it, if you have a family and no place to live, then you are in trouble. So let’s start with the basic necessities, you need your home. Lets try to save it from going into foreclosure and keep you in your home.
The government has a program called Making Home Affordable that helps home owners modify their mortgage. There are requirements you must have in order to qualify you for the program. One of the main requirements is that your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner’s association dues, if applicable) is more than 31% of your current gross income. So that means to help you qualify, you need to lower your debt. Once the service provider can verify your debt-to-income ratio or DTI, they have to also verify that you can pay the new amount. So in order to do that you must lower your debt.
The most important thing is to look for non-essential items to eliminate from your debt. Such items as a car could be a huge debt that when eliminated may increase your chances greatly for the home loan modification.
Most people have a car that they commute with to work. The car could easily take up a big chunk of your monthly nugget. If you factor in insurance and very high gas prices then that nugget could reach between $800-$1200. Think of any possible way to lower that payment monthly because the goal is to decrease your debt. If you can decrease your monthly debt then you are more likely able to get a loan modification by showing the bank that you have saved money in one place and are able to apply that money saved to your home loan. The bank is more willing to qualify your loan modification if they see that you are making an effort to pay the newly reduced monthly mortgage payment. If this means that you have to sacrifice waking up late and leisurely take the car to work and now you must wake up an hour earlier to catch the bus, then just do it.
There are many other subjects to learn about the Making Home Affordable program.
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