Republicans have attempted 39 different times to repeal the Patient Protection and Affordable Care Act. But they are also seething over a lower profile part of the bill. It is called the Student Aid and Fiscal Responsibility Act (SAFRA), which made the government the sole originator of federally back student loans. Paul Ryan says that it is a government takeover of the private student loan industry. Although you are still able to get a private student loan.
Republicans feel that the government should serve as an insurance guarentor for the private sector as they offer loans to students. They want taxpayers to assume the risk and banks enjoy the profit. Before SAFRA was passed, federally backed student loans were administered through the Federal Family Education Loan Program ( FFEL). A private partnership in which the federal government subsidized and guarenteed student loans that were originated by private lenders. This meant that banks recieved tax payer money to keep interest rates low. The government guarenteed that it would pay back up to 97% of the lian principle if the loan borrower defaulted, meaning there was little need for lenders to worry about credit risks. That produced an inefficient way to provide loans, but a great way to prop up banks and waste money.
This is what Republicans wish to repeal. SAFRA uses half of the estimated $61 billion in savings from cutting out banks to increase the maximum annual Pell Grants scholarship to $5,500 in 2010 and to $5,975 by 2017, while indexing the grants to inflation. Lowered monthly payments on federal student loans and shorten the debt forgiveness time line. For new loans after 2014, this will means graduates will have to pay 10% of disposable income instead of 15%. It also provides $2.55 billion to support historically black colleges and universities and minority serving institutions. $2 billion for community colleges and $750 million for a college access and completion programs for students.
Repealing this means larger payment, smaller Pell Grants, reduced support colleges and universities while putting billions of dollars back into Wall St. banks. The Democrats and President Obama are attempting to make it easier to go to college, and easier to pay it off. Why would Republicans want to repeal this? Maybe these large banks are offering large amounts of lobbying money.
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