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At MU, McCaskill speaks in support of federal student loans

Tuesday, September 4, 2012 | 7:01 p.m. CDT; updated 12:56 p.m. CDT, Tuesday, September 18, 2012
Sen. Claire McCaskill is interviewed about her re-election campaign after speaking about her support of federal loans for higher education. McCaskill, who is running against Rep. Todd Akin, spoke to MU students Tuesday at the Harry S Truman School of Public Affairs in Middlebush Hall.

COLUMBIA — Candidates for one of Missouri's U.S. Senate seats couldn't disagree more on whether or not federally backed student loans are a good idea.

U.S. Sen. Claire McCaskill highlighted her support for the loans in a visit to MU on Tuesday afternoon that's part of a tour of colleges and universities in Missouri. She also visited Westminster College in Fulton.

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McCaskill's Republican opponent in the U.S. Senate race, U.S. Rep. Todd Akin, has proposed that the federal government get out of the student-loan business and leave it to private lenders. McCaskill called that idea “wrongheaded, naive and dumb,” in a speech to about 30 MU students in Middlebush Hall.

“If your family doesn’t have the money to send you to college, and you walk into a bank and say, ‘I have no credit record, I have no money, I have no marketable skill. But by the way can you give me 10, 20, 30, 40, 50 thousand dollars to go to college?’ The bank is not going to say yes. The bank is going to say that’s too big of a risk,” McCaskill said.

Akin’s campaign did not respond to multiple requests for comment.

However, the congressman, who represents Missouri's 2nd District in the St. Louis area, has publicly stated his opposition to federal involvement in student loans. In an April 21 Republican primary debate, Akin called federal backing of student loans “the equivalent of the stage three cancer of socialism.”

“What the Democrats did to get rid of the private student loans and take it all over by the government was wrong,” Akin said in a video clip from the debate on YouTube. “It was a lousy bill. That’s why I voted no. The government needs to get its nose out of the education business.”

According to a position statement on Akin's website, he supports eliminating the U.S. Department of Education.

"Education of children is best left to the wisdom of parents, teachers and the taxpayers of local communities," the statement reads. "... The federal government only adds inefficiency to the education process."

According to data from MU’s Office of Financial Aid, undergraduate students accepted 25,055 federally backed loans during the 2010-11 reporting period.

MU freshman English major Margaret Osborn said a recently discovered interest in politics prompted her to attend McCaskill’s speech. Osborn said student loans are a “very important” factor in her decision to support McCaskill over Akin.

“The topic of loans is relevant to students here,” Osborn said. “I’m personally taking out loans. I’m definitely for McCaskill.” 

Supervising editor is Scott Swafford.

Chart: Anna Burkart/Missourian


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Comments

Corey Parks September 4, 2012 | 10:19 p.m.

Anna Burkard, Bobby Watson and Scott Swafford: Is there anyway you can edit this article and include a graph showing the correlation of increase tuition costs with the availability of govt student loans? I imagine many reading this article as well as many students would be shocked to see why they are going further and further in debt.

(Report Comment)
John Schultz September 5, 2012 | 12:43 a.m.

And people wonder why college tuition increases well over the inflation rate? With all that federally-guaranteed money out there, why should universities keep their costs down?

(Report Comment)
Michael Williams September 5, 2012 | 8:05 a.m.

"“If your family doesn’t have the money to send you to college, and you walk into a bank and say, ‘I have no credit record, I have no money, I have no marketable skill. But by the way can you give me 10, 20, 30, 40, 50 thousand dollars to go to college?’ The bank is not going to say yes. The bank is going to say that’s too big of a risk,” McCaskill said."
______________________

Isn't this how the payday loan industry got its start?

Price follows the availability of money. Make more money available, the price goes up.

And Dems say THEY are the party making college more affordable.

Bah humbug.

(Report Comment)
Christopher Foote September 5, 2012 | 9:47 a.m.

Mr. Akin's position appears to be an endorsement of crony capitalism and increasing the deficit. The bill Mr. Akin is referring to for which he voted "no", changed the old system of guaranteed private profits and federal (read socialized) payments to cover losses for the lenders. In the old system, the government would pay private banks to lend money to students for tuition and would cover the losses for any defaults. The bill he opposed eliminated the public subsidy for private banks and allowed for direct loans from the government. Note the banks can still make student loans; what they (and Mr. Akin) dislike is that their losses are no longer subsidized by the government. Not paying the banks results in a small but not insignificant savings of $61 billion over the next decade. Why does Mr. Akin want the government to shuttle tax payer dollars to the private banking industry? Also Mr. Akin is rather woefully misinformed when he states "What the Democrats did to get rid of the private student loans and take it all over by the government was wrong". The old system was ALL government money with privatized profits. Instead of voting to increase the bottom line of guaranteed lenders, Mr. Akin should focus his attention on how best to improve higher education opportunities for Missouri students.

(Report Comment)
Richard Saunders September 5, 2012 | 10:50 a.m.

While I've little doubt that McCaskill is all for creating an inescapable lifetime of debt to enslave future generations, it's surprising to see her promote it.

Lending should never be a political activity.

(Report Comment)
Corey Parks September 5, 2012 | 10:56 a.m.

All I know is it used to be you could get your education money from a wide range of places and now it is Direct Loans and nothing else. Providing you go through the schools loan system. We also were notified a few months ago that our direct loans payment will no long be sent to Dept of Ed and will instead be autopaid to MOHELA out of some other state. Strange if you ask me.

(Report Comment)
frank christian September 5, 2012 | 10:57 a.m.

From Chris F. - "In the old system, the government would pay private banks to lend money to students for tuition and would cover the losses for any defaults."

The truth - Banks lent Their money to students with subsidies if necessary, to maintain the government mandated interest rates and help with collection of loans in default. If deemed a loss, Government guaranteed repayment of the loan balance. (Wikipedia, The Federal Family Education Loan (FFEL) Program) Chris must twist information when he wants to show his distaste for anything that might be considered a "private profit". Such as "The old system was ALL government money with privatized profits." The New education loan program was skillfully slipped into the criminal ACA. As Foote always prefers, our banks were taken out of the plan and the whole thing is now funded by the American taxpayer.

As higher education prices go up we will also see more federal government involvement in, curriculum, choice of schools and other restrictions imposed by the sponsor, the federal government.

(Report Comment)
Hank Koebler September 5, 2012 | 11:43 a.m.

My name is Hank Koebler and I'm the reporter on this story. I appreciate the feedback from everyone. Corey Parks, your suggestion about the increase in tuition and the increase in loan amounts is a great one. I'll be following up with the Office of Financial Aid and trying to obtain that data. Stay tuned for more information.

(Report Comment)
Corey Parks September 5, 2012 | 4:00 p.m.

First hit on google: http://www.theeternaluniverse.com/2012/0...

"Of course correlation does not imply causation and frankly it may be that the increase in tuition is driving the increased availability of financial aid, not the other way around, but I do find this idea intriguing. As people that have spent a lot of time at colleges, I'm interested in your thoughts. Does increased financial aid lead to higher tuition and if so how can the government help keep higher ed affordable?"

(Report Comment)
Christopher Foote September 5, 2012 | 4:16 p.m.

@Frank,
The law does not prevent banks from making student loans, it no longer subsidizes their defaults. What's your complaint?
Second, the law was passed under the Health Care and Education Reconciliation Act of 2010.
It was not passed as part of the ACA. The latter passed with a filibuster proof 60 votes in the Senate and was signed into law on March 23 2010. The former was passed via reconciliation and was signed into law on March 30 2010. I understand conservative revisionism dictates that you believe otherwise, though it seems like a silly thing to lie about:
http://www.columbiamissourian.com/storie...

(Report Comment)
Corey Parks September 5, 2012 | 4:52 p.m.

this topic amount anything else having to do with left or right is prone to revisionism. Politicians on both sides are masters of course only one side has the media helping them out.
Just for fun I called Bank of America how have my business account and asked about applying for a student loan and was told that they have suspended the student loan practice about 2 years ago. So I called up my online bank and they said they are no longer allowed to provide money for student loans but I could take out a long term loan to use for whatever I wish.

(Report Comment)
frank christian September 5, 2012 | 6:32 p.m.

C. Foote - "Second, the law was passed under the Health Care and Education Reconciliation Act of 2010.
It was not passed as part of the ACA."

Good point! Let me correct. " The New education loan program was skillfully slipped into the criminal, Health Care and Education Reconciliation Act of 2010, the act passed that year for the purpose of amending, the criminal ACA."

As Corey has noted, tho not allowed to make "student loans" our banks may still make loans to students. Another BO term is apparently needed to correct that loop hole in the progressive plan for our educational system.

(Report Comment)

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