Episode 41: A New Option for Student Loans?

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I read this story in the NY Times this morning and it piqued my interest. Could this be the student loan solution we have been waiting for?

I have been lucky to study at two #1 ranked universities in my field of study. The drawback to receiving great education is incurring a massive college debt that is near six figures. Under the current system, college students can borrow a certain amount of federal loans – I believe up to $9,800 per semester (this number is higher for law and med students), and the rest of the loans come from private lenders. Government loans are much better for students because half of the loan is subsidized by the government, meaning we don’t have to pay interest on that portion of the loan. Also the interest rate is fixed, meaning what you see is what you get. To figure how much your loan will cost over its life, one simply needs to pull out a calculator.

Private loans are a bit trickier. Different banks compete for better interest rates, but often these rates are variable, and often higher than Federal Stafford Loans. The big problem is moving your money around; if one wanted to consolidate their loans, especially useful if the student has attended more than one school, coordinating that effort with the banks is a less than pleasant experience, at least for me. Another problem with private loans, is if the bank and the school are using a different system to disburse the loan, messy paperwork can lead to delay in getting the money – a problem I had all 4 times I had to apply for private loans in graduate school (and you’d think the kinks would be worked out after the third mishap!).

From what I gather in this article, what would happen is private lenders would dump their loans onto the government, which would free up money for lending in other areas. However, if the government is going to be handling the disbursement of college loans, then the private student loan industry would effectively become nullified. Of course, I imagine one could still take out a private loan in the future, should these plans proceed, but without the federal guarantee.

This is bad news for the banking industry, but excellent news for students I think. Government bureaucracy gets a bad rap, but in the case of student loans, it is a perfect system. As far as I know, all college with financial aid departments work from the same system, so as long as the student files their FAFSA on time and stays within the school deadlines for filling out loan information, the money is always ready by the first day of school. Private loans can be a nightmare to receive, but it is also a nightmare to pay back. The rules vary from bank to bank, but government loans have more options to help students repay loans in financially tough times. Also, half of the loans are subsided, so there is less interest to pay. Lastly, from a psychological standpoint, owing the government back for a student loan doesn’t feel as bad as owing money to a bank; I feel my private loans are like a massive credit card bill. Government loans have much more leeway for late payments, as they don’t immediately affect one’s credit score until after six months of nonpayment.

I know people will argue that “socializing” education is un-American, but if college students can’t afford to go to school, then we are going to continue to fall behind other countries in innovation – where the U.S. currently ranks as the 6th most innovative country according to some reports. It is not really socialism, one can still pay-as-you-go, borrow from private lenders, and such. It is a better option for most students however, as college tuition costs continue to rise.

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Episode 40: What a Difference a Month Makes

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Post Presidential Address Thoughts



Wow. Last night’s address was truly something to behold. It is amazing how the face of our nation has changed so much in such a short time – women leaders, blacks, whites, Hispanics, and Asians in the cabinet, Secretary of State Hilary Clinton and President Obama exchanging kisses on the cheek… it is a good time to be an American. I can’t help but think that the world is watching this event and think “how does that country, despite all its flaws, continue to progress as they have?”

From the moment the thunderous applause began as the president was announced, I knew this address would be different. And President Obama rose to the occasion, with oratory and candor we have not seen in a very long time – and one I have never seen in my lifetime. Throughout the campaign, I have criticized Obama for lacking that “fire.” I knew he was an incredibly intelligent guy, but I wanted to see a more impassioned performance. I was rewarded tonight with a speech full of hope, frankness, a bit of reserved aggression, and that “fire” I’ve been waiting to see.

What I found most impressive about this speech is Obama touched on most every campaign promise he made, and seems very sincere in his determination to make good on his promises. As an educator, I was extremely happy to hear a real commitment to education reform we so very badly need. I am excited to see real healthcare reform within a year so I no longer have to worry about getting sick and not having the money to get treatment. He is firmly committed to green technology that I believe can free us from foreign oil in less than the ten year timeline Obama has outlined.

Pundits have made some fuss over Obama’s pledge to raise taxes on the top 2% wealthiest Americans. I don’t understand why it’s such a big deal – if you make $20 million dollars a year, you already make more than 10 families make in a lifetime. I think that we all have to assume more responsibility for ourselves and each other. And the tax increase is simply going back to the Clinton era tax code – a time when America was arguably at its most prosperous.

It was refreshing to see members of both sides of the aisle giving standing ovations for hot button red vs. blue issues like Iraq and healthcare reform. Agin, the teacher in me swelled when I Obama said (paraphrased) “not graduating highschool is not only a disservice to yourself, it is a disservice to your country.” That statement was met with the loudest applause of the night, and made me stand up and clap as well!

I can’t help but think that the GOP is a little bit more open to post-partisanship after this speech. They need to do a better job participating in government instead of opposing it. I think the next time around, democrats will be more inclusive when designing the next bill. It was a rocky start, but I think now We are all on the same page.

On a sadder note, Bobby Jindal’s response was nothing short of disappointing, and perhaps embarrassing. His tone to me sounded very disingenuous, especially after mocking the monorail train that does NOT run to Disneyland. The response to Katrina is considered to be one the republican’s biggest failures – I would think evoking that name would be taboo in red country. But to use Katrina as an example of responsible government is just another sign of how out of touch some members of the GOP are. Furthermore, there was a serious disconnect between the speech, and Jindal’s response. It seemed to me as though he wrote his reaction to the speech before even seeing it. There was a line in the speech where Obama says he doesn’t want big government, and Jindal’s response was we have to keep the money out of the hand of the hands of greedy politicians – something to that effect. It’s early, and Jindal’s story is another great example of the American promise at work, but too many performances like those will knock him out of presidential position.

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Episode 39: The Scoop Vol.3

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Every thirteenth episode, I have a post called “The Scoop,” a collection of 3 mini posts on today’s hot topics.

#1 – The Good

Not all people in the GOP are irrelevant and ineffective – there are a few stand out guys out there. First, allow me to applaud (for better or for worse) my new Governator Arnold Schwarzenegger. Sure he presided over California’s fall to bankruptcy, but he is really trying to help the state get back into the black. He also fought on behalf of Gay Rights. And he has put together a plan to get California back on its financial track. People are still going to lose jobs, money has to be borrowed, and its long term effects are still unknown, but he’s making an effort when state congressional republicans just say no. We’re not talking about pot; we’re talking about the livelihood of your constituency here.

Kudos also goes to Charlie Crist, the Florida Governor. He has openly put his political future with the GOP on the line by backing the much needed stimulus. However, I suspect that when the stimulus eventually shows signs of recovery, Crist and other GOP members who were in favor of the stimulus will be greatly rewarded by their constituency.

However, the gold medal goes to Utah Governor Jon Huntsman Jr. (which also wins an award for most appropriate name for an elected official of Utah!). He said in an interview with the Washington Times that the GOP party leaders were “inconsequential” in coming up with new ideas. I couldn’t agree with him more. He quotes a Chinese saying in the interview – if you want to see what the real future of the GOP should be, this is it.

#2 – The Bad

Political posturing is my new favorite buzzword. And there is a lot of that going on right now. Thumbs down goes to all republican governors who turn down, or even consider turning down the stimulus money to promote their political agenda over helping their state recover. I am no economist. But as I understand it, someone has to get money flowing again. The DOW is at 7335 points at the time of this writing. It was at about 14,000 points in August, so businesses have no money. And when they get money, they go on corporate junkets, raise interest and lower credit lines, and do multi-million dollar renovations to their offices. The banks are failing, so despite interest being as low as it is, they are not issuing loans. The unemployment rate fell more sharply in three months that it had in the previous two recessions combined, so Americans have no money. The only institution with the power to move money is the government – hence the stimulus. Argue over the particulars – should it be $46 Billion invested in infrastructure or $56 Billion, not whether we need a recovery package. And tax cuts have failed every time we’ve tried them, so it would be more constructive to come to the table with a new idea, rather than push tried and failed agendas. There is room for improvement for the bipartisan approach. If I were president, my office would be in the style of “House” from the TV show – dry erase board and marker, and in a room with 5 top republicans, 5 top democrats, treasury secretary, commerce secretary, treasury advisor, and a few top economic minds, banging this thing out. However, saying no for the sake of saying no is a waste of time.

#3 – The Ugly

The New York Daily post is on top of the ugly list. This story has already been hashed to shreds, so I’ll second that, given the racial history in this country, there is absolutely no explanation anyone could give to justify the printing of that cartoon. It saddens me that these racial themes are still prevalent in our society. Two steps forward, one step back.

Alabama Senator Shelby is proof positive the many GOP members live on a different plant or something. The rumor of President Obama’s citizenship has been debunked a long, long time ago. It has been thoroughly vetted, used in the campaign with no success, and Americans hate that kind of rhetoric. So why is Shelby stirring an empty pot? Fear-mongering tactics that pander to the far far right is all I can come up with. He’s our president though, why would he want to incite more chaos into an already disastrous situation?

My last bags of coal go to Sean Hannity, Rush Limbaugh, and Ann Coulter. They are insane. I saw them on various clips on the web, and I can’t get over how stupid they are. I wish they would play their tapes back on their iPods… Coulter sounds like a spoiled 14 year old, Hannity is a trouble maker, and Rush… we he was so dumb that he thought the .pdf file of the stimulus package (see where our money is going at recovery.gov) was a democrat conspiracy because you can’t use the search tool in a .pdf file… obviously he has never used a computer before.

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Episode 38: The Media Firing Squad

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This weekend, Senator Roland Burris of Illinois faced the media firing squad this past weekend during a combative press conference regarding Burris’ selection to the Senate by the ousted Rod Blagojevich. Upon Burris’ promotion to the Senate, he was asked multiple if he had any connections to the “pay to play” scandal, to which he replied no. He has recently released two affidavits that contradict his claim and the media wanted answers.

I happened to be flipping channels and I caught the beginning of the press conference on CNN. And I watched it until CNN cut it off for a different story. I must say, as a human, I feel bad for Burris. Watching him was like a scene in a movie where a guy gets shot, but still keeps on fighting, but as he takes more bullets to his body, he slowly drops to the ground and dies. And I think that’s what’s going to happen as his career in the Senate.

My take on it – I think he is innocent of the pay to play, and very guilty of perjury. Senator Burris hid the fact that he had contact with Blagojevich’s people, including his brother, because he would have had a hell of a time explaining that to the Senate Committee, even if he did nothing wrong. Withholding that kind of info after all the media hoopla seems a bit too convenient to be a lapse in memory. Burris should do the right thing for himself, and his state, and resign. If the attorney general doesn’t get him first, the people will in 2010. With the republicans refusing to budge for the sake of standing up to their ideals at their constituency’s expense, we need as many viable democrats in congress as possible.

Another note, one would have to be absolutely foolish to take an appointment from a governor who on the verge of facing jail time for “pay to play” politics. From the moment the Blagojevich story dropped, every single state congressmen, law enforcement people, and member of the media was gunning for him. Was it really worth risking his political career by accepting a tainted nomination? Apparently so…

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Episode 37: A New Republican Puppet

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Allow me to tell a story.

Once upon a time, there was an historic race for the democratic presidential nominee. Many entered the race, but were overcome to two transformational figures who could become either the first woman or first black president. The battle was long and arduous. Both candidates drew huge crowds and garnered tremendous support. In the end, it would be the Obama who won the candidacy. On the day that Hilary Clinton conceded the race, Clinton HQ staffers around the country let out a collective gasp in disbelief. Many of them vowed to abstain from the elections, or vote for McCain because their team lost, and they lacked faith in Obama at the time.

Obama, having defeated Goliath gained a mighty tailwind going into the presidential race. The first wind of population swelled to a crescendo when he delivered one of his most powerful speeches before the DNC when accepting his nomination. However in the distance, rolling thunder clouds were brewing. The dark clouds became a fierce storm a week later when McCain unleashed his secret weapon against Obama – the unknown, untested, (the un a lot of things), Sarah Palin. In one fell swoop he ignited the republican base and nominated one who could be the first women to hold a seat in high office. The rest of America knew better. Sarah Palin was a mere puppet whose primary objective was to attract disenfranchised Hilary voters. Americans were smarter than that and resoundingly rejected the scare tactics, and the same old ways of politicking.

Fast-forward to present day. Obama is our first Black president. He enjoys massive popularity at home and abroad, and offers a degree of intellect and compassion we haven’t seen in the White House for nearly a decade. Republicans would be foolish to challenge Obama when he has the amount of political capital that he has, so they have instead attacked the main stream media, Nancy Pelosi, and left-wing bloggers. Despite their best efforts, they are still losing the message war, primarily because they have no message. In such a case, it may be prudent to spend some time evaluating the real world and tailor their conservative principles to the way things work in today’s globalized economy, information technology, and cross-culturalization. However, they have elected to ignore future trends, and have decided Sarah Palin could very well be the new voice of the GOP, with Rush Limbaugh as their surrogate leader until Palin beefs up on her facts, history, and newspapers. Sarah Palin is not version 2 yet, and Rush Limbaugh is not a politician, so they still need a legitimate face of the party. Now they can actually look among their ranks and try again to find someone who is a republican future thinker (an oxymoron I know). However, they resort to a tried a failed tactic (a common theme) and instead chose another puppet to be the face of the party. Enter Michael Steele. His selection as the leader of the RNC makes him the first African American leader of the RNC to much chagrin to the KKK. What better way to steal the African American vote from Obama than to pit him against another African American candidate. The GOP forgot a key component when crafting their new puppet however; they left out the future thinking component that is a necessary tool when combating a person with Obama’s superior intellect. They have a puppet that will do anything and say anything the puppet masters say. It’s a throwback to the shameful days of our history, and republicans should be ashamed. And I am personally offended that they chose him. Because after reading up on him, he is as close to a conservative future thinker as the GOP could cook up, but he has been assimilated by the collective and forced to repeat republican talking points that are divisive, asinine, and completely out of touch with reality. Just for once, I’d like to see republicans do something with honesty and integrity.

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