What affects of no economic bailout have on current and prospective college students?
December 16th, 2009 | by admin |No name asked:
What affects would the $700 billion bailout (or no bailout) have on college students with student loans?
What affects would the $700 billion bailout (or no bailout) have on college students with student loans?
If no bailouts, would college students have difficulty getting a student loan. What will happen to those who already have a student loan?
If bailout is passed in congress, what affect would it have on tuitions?
Thanks, (I am very nervous since I am a college student and don’t have much money)
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3 Responses to “What affects of no economic bailout have on current and prospective college students?”
By Danimal on Dec 18, 2009 | Reply
Best case scenario: Nothing happens - companies that failed stay failed, the banking sector slowly rebuilds and we learn form this mistake, making sure that other companies don’t use the same practices that caused this mess.
Worst case: The complete failure of the entire credit market. This means that basically you could never buy anything unless you could pay cash for it. No home loans, no car loans, no buying iPods with credit cards.
By Dan on Dec 20, 2009 | Reply
1) No affect. There isn’t any provision regarding student loans.
2) Possibly slightly more difficult to obtain one if you have no/poor credit history.
3) Tuition will go up at the same 8-10% (just like it always has). In other words, no affect.
By aguiar7635 on Dec 20, 2009 | Reply
Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:
Common Sense Plan.
I. INSURANCE
A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
B. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while
working with the borrower—again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.
C. This backstop will cost less than $50 billion—a small fraction of the current proposal.
II. MARK TO MARKET
A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to
stand up, speak out, and fix this mess.