Suze Orman discusses student debt at the Remaking America Panel Student Loan Forgiveness

Suze Orman discusses student debt at the Remaking America Panel – http://consolidatemystudentloan.org

This mandated reduction in the interest rate charged by lenders, in theory, was to help American College Students to afford their education. The reverse effect has happened, as by reducing the interest rate on student loans, the government has mandated a reduction in the profitability on those loans, making them less desirable as an investment to the investors who purchase these loans from banks. (http://www.youtube.com/watch?v=uUpPaX_lbLo)

Investors in these loans provide the liquidity to the banks to make future loans. Without this liquidity or capital, banks do not have the money to make new loans.

Recently nearly 70 Student Loan Lenders have suspended their lending, as liquidity has dried up from investors and lenders do not have the capital to make new loans. This list includes the nations largest bank…Bank of America, who three weeks ago stop lending money for student loans.

Congress, the animal who created this problem last fall, by trying to mandate interest rates on student loans and who has no business setting prices in a Free Market Economy, is currently attempting to fix the problem.

Three weeks ago the US House of Representatives passed legislation to allow the Department of Education to purchase loans from lenders on the secondary market, to provide liquidity to student loan lenders, so they can make new loans. The program is called the “Lender of Last Resort Program”.

President Bush during his radio address, called for swift action by the US Senate to follow up and get legislation passed in the Senate to overt this crisis before June when the student loan applications would began to flood the market of the 2008 School Year. The call for action hopefully came in time, before the student loan consolidation market was effected. Student loan defaults would also be on the raise, with many student already seeking credit repair to solve the current student loans in default.

Wednesday, the Senate passed their version and the President is expected to sign the bill into law. This is a prime example of why government has no business trying to mandate prices in a Free Market Economy.

Further, this legislation uses Tax Payer Money to purchase these loans, putting the RISK of student loan default into the hands of the tax payers. This risk belongs in the investors pockets, not the American Tax Payers pockets.

For more advice and information on Student Loan Debt Consolidation, Student Loans, Federal Loans and Stafford Loans, visit http://www.consolidatemystudentloan.org or call toll free 1-888-894-0777 for a FREE assessment!

Contact Info:
Horizon Debt Group, LLC. Student Loan Division: Nationwide Student Loan Services.
1900 S Harbor City Blvd. Suite 206
Melbourne, Florida 32935

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3 thoughts on “Suze Orman discusses student debt at the Remaking America Panel Student Loan Forgiveness

  1. This video is utterly important to understand the dangers of Federal
    Student Loans if they are not consolidated to pay off the original lenders
    whom which are backed by the Government. If not otherwise consolidated then
    they have every opportunity to inflate the amount of debt one has incurred
    through Federal Student Loans and the interest rates do not stop even when
    deferred. Unless consolidated there will not be any Federal benefits such
    as Forgiveness and capped interest rates. If defaulted then they will sky
    rocket due to the fees collection companies charge. We are seeing 14k in
    fees on a 64k defaulted student loan. Not to mention that they will also
    garnish wages and seize bank accounts and any property or estate will
    ultimately inherit the debt in form of a lien that will be subordinated
    prior to the sale of said property. Consolidate your student loans now
    before the programs are no longer available. Once consolidated there will
    be so many additional benefits that are not associated with the original
    lenders. 

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