Jan 29, 2010
29
0
0
Status
DPT / OTD
A lot of people on here are talking about how Obama-care will affect PT's in the future. Many of us just got into school and are looking at financial aid, and unfortunately the fact that the government now controls all student funding for education has been vastly overlooked. Does anyone know how applying for and receiving student loans will change?
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
good question. The education reform concept has been completely under the radar.
 

PT Dad

10+ Year Member
Jan 26, 2009
109
0
41
Status
Non-Student
It's another step toward government takeover of business and the transformation of the U.S. into a socialist country. You still need to fill out the FAFSA. If the government deems you to be worthy by being either the correct race, gender, or sexual orientation, I suspect that you will receive a subsidized interest rate with favorable payback arrangements. If not you will undoubtably pay a higher interest rate with more onerous payback terms. And as more money will be available for students naturally tuition rates will increase. The government is sure to tell you what you can study also. Sorry comrades, thats how it works in the new United Socialist States of America. Seems ironic that we spent 50 years fighting the Cold War to defeat communism and now we are turning towards it. How do you like change now.
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
[YOUTUBE]http://www.youtube.com/watch?v=ei2CH9A3H8U[/YOUTUBE]
 

DancerFutureDPT

Academic Administrator
Moderator
7+ Year Member
Jun 9, 2009
843
17
251
Chicago suburbs
Status
Academic Administration
interesting...I haven't heard that before, but he makes a good point.


wait, so was there actually an education reform bill attached with the healthcare bill they passed yesterday? if so, what did it say and how come it didn't get any press?
 
Feb 6, 2010
18
0
0
Status
Rehab Sci Student
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/21/AR2010032103548.html

Brief explanation of the student loan reform attached to the healthcare reform.

Basically when you received federal funding from filling out the FAFSA, those came from private sources. With the government getting you a low interest rate and/or paying back the interest while you're in school (depending on if it was subsidized or not).

Now, the government will use savings to lend directly to students and bypass the private sector. Private banks put up a lot of fuss about this, because they made a very large profit through providing federal funding (which was why they always recommended you try federal aid first before applying for private loans, even their own). Republicans argue that this was a good system that didn't need to be changed, and are worried about full government control of lending of federal aid. Democrats argue that this will allow for students to receive more funding from grants and will save the country money.

Your race, sexual orientation, etc. will play no part.
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
interesting...I haven't heard that before, but he makes a good point.


wait, so was there actually an education reform bill attached with the healthcare bill they passed yesterday? if so, what did it say and how come it didn't get any press?
He not only makes good points but great points! Now all loans are via government. Take in point that student loans are dischargeable only by death, tuition annually increases, the minimum monthly payments are encouraged by government via IBR, and all that accrued interest generates revenue; It just seems like an excellent avenue for collecting additional government revenue.
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/21/AR2010032103548.html

Brief explanation of the student loan reform attached to the healthcare reform.

Basically when you received federal funding from filling out the FAFSA, those came from private sources. With the government getting you a low interest rate and/or paying back the interest while you're in school (depending on if it was subsidized or not).

Now, the government will use savings to lend directly to students and bypass the private sector. Private banks put up a lot of fuss about this, because they made a very large profit through providing federal funding (which was why they always recommended you try federal aid first before applying for private loans, even their own). Republicans argue that this was a good system that didn't need to be changed, and are worried about full government control of lending of federal aid. Democrats argue that this will allow for students to receive more funding from grants and will save the country money.

Your race, sexual orientation, etc. will play no part.
Who pays for the grant money students receive? If you guessed someone else then you are right. Schools see this as easy money and have calculated it into their tuition costs. It doesn't help anyone out except the institutions. More guaranteed loans and grants means more and more of the idealistic youth will be going deeper and deeper into student loan debt with the mistaken promise that they are entitled to a better paying job with the overpriced piece of paper. Basic laws of supply and demand state once everyone goes on to higher education and gets that Bs/BA degree, it becomes more and more devalued as more people have it. Considering that many businesses that live in the real world of the free market have actually turned away from college grads because they now come at too high of a cost. They'd rather have someone go through an apprenticeship and pay them half of what the college grad will demand. Results show that the college degree really isn't even a good standard to assess performance. In an age of inflated grades, that letter is also devalued. Summary... this is not good.
 
Feb 6, 2010
18
0
0
Status
Rehab Sci Student
So more people going to college and education becoming more affordable isn't a good thing. Interesting.
 

DancerFutureDPT

Academic Administrator
Moderator
7+ Year Member
Jun 9, 2009
843
17
251
Chicago suburbs
Status
Academic Administration
Who pays for the grant money students receive? If you guessed someone else then you are right. Schools see this as easy money and have calculated it into their tuition costs. It doesn't help anyone out except the institutions. More guaranteed loans and grants means more and more of the idealistic youth will be going deeper and deeper into student loan debt with the mistaken promise that they are entitled to a better paying job with the overpriced piece of paper. Basic laws of supply and demand state once everyone goes on to higher education and gets that Bs/BA degree, it becomes more and more devalued as more people have it. Considering that many businesses that live in the real world of the free market have actually turned away from college grads because they now come at too high of a cost. They'd rather have someone go through an apprenticeship and pay them half of what the college grad will demand. Results show that the college degree really isn't even a good standard to assess performance. In an age of inflated grades, that letter is also devalued. Summary... this is not good.
You bring up a good point over the devaluation of the BA/BS degree....and now people are "overqualified" for their jobs. I applied for a part-time job at a university as an administrative assistant type role, something that the only requirement listed was "high school diploma", and I had my BA at the time....the job ended up going to someone with a Master's degree. The entry level degrees are now moving up (DPT anyone?), because everyone is getting a Bachelors and is fighting for jobs to pay back their loan debt. Yes, more people getting educated is good, but not every 18-year old entering college understands that it isn't free money and has to be paid back. The debt is also why a lot of college grads are turning into boomerangs and moving back in with their parents, myself included. While I'm saving for grad school and working a basically just over minimum wage job, I'm living at home because I can't afford rent unless I want to spend my life savings on it, which I don't.

The only place I haven't seen Masters degrees winning out over BA/BS is in public schools, because those with a Master's are more expensive than those with a Bachelor's. In public schools they still have to pay someone with a higher degree more, so given the choice between 2 first year teachers, one with an MS and one with a BS, the BS will get it. But in other jobs, they aren't necessarily required to pay someone with a higher degree a higher salary, so they'll take the person with more education (all other things being equal, of course).
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
So more people going to college and education becoming more affordable isn't a good thing. Interesting.
It depends on how you define affordable. It can either be defined as the ability to pay off the loan in the standard ten year time frame with monthly payments being no more than 10-15% of your income without IBR. It can also be defined as the ability to get loans on an overpriced education due to those guaranteed loans which will be made affordable with a long-term, minimum monthly payment with IBR which will end up costing two or three times the principle after the 25-30yr repayment plan. It looks as if we are now defining "affordable" as the latter.
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
You bring up a good point over the devaluation of the BA/BS degree....and now people are "overqualified" for their jobs. I applied for a part-time job at a university as an administrative assistant type role, something that the only requirement listed was "high school diploma", and I had my BA at the time....the job ended up going to someone with a Master's degree. The entry level degrees are now moving up (DPT anyone?), because everyone is getting a Bachelors and is fighting for jobs to pay back their loan debt. Yes, more people getting educated is good, but not every 18-year old entering college understands that it isn't free money and has to be paid back. The debt is also why a lot of college grads are turning into boomerangs and moving back in with their parents, myself included. While I'm saving for grad school and working a basically just over minimum wage job, I'm living at home because I can't afford rent unless I want to spend my life savings on it, which I don't.

The only place I haven't seen Masters degrees winning out over BA/BS is in public schools, because those with a Master's are more expensive than those with a Bachelor's. In public schools they still have to pay someone with a higher degree more, so given the choice between 2 first year teachers, one with an MS and one with a BS, the BS will get it. But in other jobs, they aren't necessarily required to pay someone with a higher degree a higher salary, so they'll take the person with more education (all other things being equal, of course).
My story is similar as I have been working part-time as a teacher's aide/ science tutor. My BS degree has paid me $1.50 more an hour over a high school grad. They get basically minimum wage. Surely this doesn't represent the cost of the BS degree. It has been a good learning experience but experience only goes so far when you're getting paid so little. So thus I now work another job as a waiter, another job that only requires a HS diploma if even that.

The best part is due to guaranteed loans the banks do not care about the ability of the students. I see this first hand. How many kids I see that are having trouble multiplying and dividing by 1000. The work ethic sucks as well. I can't wait for the wave of students that come to me near the end of the semester that hope I can waive some magic wand and give them a "D" so they can get into their program. Education is great but this isn't it. These kids aren't really learning. Half of them don't care, and these are yours and my tax payer dollars giving them these grants. I sense future IBR applicants in the years ahead.
 
Last edited:
Jan 29, 2010
29
0
0
Status
DPT / OTD
PTDAD: I don't like change, nor did I vote for it. I've stood against it, alone for the most part in my generation, for a long time. I guess the bright side is, since the government programs are going to cause them to hand out these I.O.U.'s to PTs, Dr.'s, and whoever else for medicaid and medicare instead of actual MONEY it is only fair that I will be able to pay my student loans with I.O.U.'s as well...right? haha...Is it November yet?

On a serious note, I am extremely concerned about being in debt to the government at such a critical time in our history with our debt where it is. I don't think any education should be run by the government really... and don't like the idea that they can come after me any time they like.... but as someone who grew up in a suburban, middle-class family, went to a chartered high school, earned the HOPE scholarship all 4yrs in undergrad, and am qualified to pursue more education...I've probably had my fair share and it's time for me to move aside to level the playing field.
 
Jan 29, 2010
29
0
0
Status
DPT / OTD
The bad thing is the control gets over who does and doesn't get money. Looking at a credit background, field of study, tuition, the amount of money you or your parents have or no longer what they will use to decide who does and doesn't get a loan, and how much the loan will be. In speeches by our president he has compared education reform to distribution of wealth, and giving those who haven't had the opportunity for education to get their 'fair share'. I'm all for helping the less fortunate, but thats what scholarships and grants are for. The amount of private scholarships for the less fortunate is extremely large. When the government has complete control over education until you are completely out of debt, that control can influence many aspects of your life. In physical therapy for example: where you want to practice, what field you want to practice in, will you be a therapist for the government, you need to go where supply is low and demand is high so here are your choices. Banks don't care. Banks just want their money back, and the longer it takes you the more interest they make so don't rush. So, yeah, you may lose more money in interest to the bank if it takes you longer to pay back your loan, but you keep all your liberties. Banks are being capitalists.
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
So it's better for a bank to get money from the gov't on my behalf in the form of subsidization for the duration of my schooling then gain profit from that same loan in the form of interest? Or is it better for the Gov't to get that same money I would be spending on my loan anyway without giving profit to the banks. Am I missing something? Why, in non rhetorical terms, and actual factual language (ie english without any political influence) is this a bad thing?
It's better to have no government involvement at all in student loans. Look at the price of education your parents payed when they went to college. Back in the day a student could work and pay off college as they went. Student loans weren't all that common. If they did get loans out the banks were making sure that they could get a return on their investment. Thus they would look at the ability to pay back loans. There was a risk of lending the money and this risk if calculated correctly would return revenue on the interest. Money wasn't freely available for funding so people had to work and make extra money to pay for it. This thus deterred people from the process, thus decreasing the supply of the degree, and increasing its value.
 
Jan 29, 2010
29
0
0
Status
DPT / OTD
government involvement in education hasn't really worked out all that great...check our national drop out rate. with the new regulations involved in this loan reform, after a year or two schools are going to end up getting I.O.U.'s much like dr's are getting for medicare (bc we don't have ANY money left for this) and the students who don't get them will be paying very high tuition prices. If everyone who can't afford college gets a loan from the government and those who they think can or should be able to afford to fun their entire college education has to pay it will turn into affirmative action in schools. I know I've personally already experienced getting turned down from schools out of undergrad due to the amount of kids accepted from the area I live in and how many had been taken from there. It's not uncommon for less qualified students to get into undergraduate programs due to ethnicity or income level. If they truly wanted a fair playing field we'd all work our butts off for our grades and be accepted accordingly.

I hope I'm wrong here...but we've seen this in other countries. When the government controls the cash flow an institution (aka success or failure) they also will eventually gain access to what is being taught.
 
Sep 5, 2009
52
0
0
Status
Under Obama's new plan, interest made off of loans go to the Government not to the private sector(banks).

Hurting US banks, especially now, is NOT a good thing. If banks aren't able to provide loans(in the general capacity) due to lack of monies, the economy almost always suffers due to potential new business stifling.

Obama needed billions for his healthcare reform and since the federal government was already backing banks so banks could give out loans to students with terrible or no credit(anyone), Obama decided he would clear out the middle man. Thus, giving the government all interest made on student loans instead of the banks.

And from here it comes down to your own political beliefs, large Government versus small Government. Should the power and control lie within private sectors or the government?

Historically the government has done a poor job managing social programs/entities up to this point, I don't see health-care/student aid reform as an exception.

This is just my opinion.
 

soccer31

10+ Year Member
Dec 22, 2008
96
0
0
Status
Pre-Rehab Sci [General]
And from here it comes down to your own political beliefs, large Government versus small Government. Should the power and control lie within private sectors or the government?

.
Lets have the power and control lie within all this big bank corporations who cannot fail, so next time the economy goes down we can't afford for them to go down with it and have to spend money with more stimulus packages!!!!! (please note sarcasm of my part)
 
Jan 29, 2010
29
0
0
Status
DPT / OTD
pwrtrainer: I am in no way, shape, or form a racist. I do apologize if what I said offended you, not my intentions.
 

DancerFutureDPT

Academic Administrator
Moderator
7+ Year Member
Jun 9, 2009
843
17
251
Chicago suburbs
Status
Academic Administration
I could be way off here...but if the private sector is offering the loans, and not the gov't, wouldn't there be more competition between the banks to give good interest rates (at least theoretically?)? If Bank A is offering a loan at 5%, and Bank B is offering one at 6%, then people will go to Bank A to get the loan because they will pay less. No one would willingly go to the place where they will have to pay more in interest. Of course, this is only if the government is the only source of loans.

If the gov't is giving out all the loans, it removes the freedom of choice and they could forseeably make the interest as high as they want without the option of students going elsewhere. It removes the need for the interest rates to stay relatively low, because no one is trying to compete for business.

I'm confused...will there still be private loans offered through banks or are those totally gone now with the passage of this bill? What if the feds don't give enough aid?
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
So what does the cost of education 40 years ago have to do with government loan programs now?
The point is government didn't guarantee student loans 40 years ago. That is the entire point.
 

lee9786

10+ Year Member
7+ Year Member
Feb 3, 2009
616
9
141
Status
Pre-Rehab Sci [General]
I could be way off here...but if the private sector is offering the loans, and not the gov't, wouldn't there be more competition between the banks to give good interest rates (at least theoretically?)? If Bank A is offering a loan at 5%, and Bank B is offering one at 6%, then people will go to Bank A to get the loan because they will pay less. No one would willingly go to the place where they will have to pay more in interest. Of course, this is only if the government is the only source of loans.

If the gov't is giving out all the loans, it removes the freedom of choice and they could forseeably make the interest as high as they want without the option of students going elsewhere. It removes the need for the interest rates to stay relatively low, because no one is trying to compete for business.

I'm confused...will there still be private loans offered through banks or are those totally gone now with the passage of this bill? What if the feds don't give enough aid?
Yes competition would lower interest rates as well as require the student to be self informed about their financial situation. Right now most kids don't even know what institution they are borrowing from. They just sign on that line, and the interest rates are pretty much dictated.

I don't know about obtaining additional loans for say living expenses. That is a very good question.
 
Sep 5, 2009
52
0
0
Status
Soccer,
The reason banks were having these problems was due to government pressure. The government pushed banks to make loans more available to those in society who might never have qualified for those loans otherwise.

Dancer, I'm in agreement with you. The logical conclusion you made on interest rates "hit the nail on the head". Competition is a great thing, it drives better products and services... This why government runned entities usually fail or overspend. No competion causes poor management, and poor management = failed objectives. How does the government usually fix things? Mindless spending.

Also, I wouldn't think Obama would cut monies from student aid. He needs as much as he can possibly get from those interest rate paybacks to pay for his HUGE plan.

Again...this is just my take...