[infinite monkey]

Under this new system, colleges might charge whatever they want because their customers simply turn the bill over to the U.S. taxpayer who has no say in the transaction. Under such a system what incentive would a kid have to live at home and go to a community college? Why not attend the most expensive university that taxpayer money will allow?

Wow, this is some seriously reaching speculation. What do you debate professionals call this tactic?

I'm not surprised, from the link, the first thing I see are big giant ads for Glenn Beck touting Goldline International, said company under investigation for scamming people. Oh, and direct link to listen to Glenn Beck live. All Glenn, All the Time.

http://gawker.com/5591413/glenn-beck...-investigation

Here are some other facts (not speculation) from the National Association of Student Financial Aid Administrators:

The administration indicated that the .5 percent interest rate reduction incentive for borrowers who consolidate their Federal Family Education Loans (FFEL) and Direct Loans will only be offered to a limited pool of borrowers. The incentive will only be available to borrowers who received a federal loan since 2008 and also receive a federal loan in fiscal year (FY) 2012. Eligible borrowers will be notified by the Department and must consolidate between Jan. 1, 2012 and June 30, 2012 because the recent Budget Control Act eliminates the Department’s authority to provide borrower incentives After June 30, 2012. The administration encourages borrowers with FFEL and Direct Loans to wait until Jan. 1, 2012 to consolidate so can benefit from the incentive.

Regarding the more generous IBR terms, the administration says that the plan would not override the current IBR program, but would operate separately. The plan will be a topic at the upcoming loan-related negotiated rulemaking and will likely fall under the “early implementation” provision—meaning that the Department can enact it early. Many specific details are not yet available and will likely not be addressed until negotiated rulemaking and implementation.

Currently, nearly 6 million students have loans from both FFEL and DL servicers. The administration plans to offer repayment incentives for students with split servicers if they move all of their loans over to DL. Students would be able to receive up to a 0.5 percent reduction to the interest rate on some of their loans— .25 percent reduction on consolidated FFEL loans and an another .25 percent reduction on the entire consolidated FFEL and DL balance. The administration has referred to this initiative as a "special" consolidation where students will be able to keep the terms and conditions of their initial loans.

In 2010, Congress passed changes to the IBR program to limit monthly payments to 10 percent of discretionary income (down from the current 15 percent) and forgiving remaining debt after 20 years (down from the current 25 years). The Obama administration hopes to implement these changes, deemed the Pay As You Earn (PAYE) plan, two years ahead of schedule, beginning in 2012.

http://www.nasfaa.org/advocacy/News/...n_Details.aspx


I'm not arguing about whether or not it's a political move. I do not know. But I do know that the article posted is also a political move, from a blogger on an obviously conservative site. It's hardly an exposé about the failures of a plan that isn't even completely hammered out yet.