The defeat of student loan refinancing

Updated: Friday, June 13, 2014
The defeat of student loan refinancing story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - Twenty-five million Americans saddled with high-interest student loans lost a chance Wednesday to have their rates lowered when Senate Republicans shot down legislation that would have allowed them to refinance their debt.

The bill was defeated, even as concerns are growing that mounting student debt is hampering economic recovery from the great recession because former students are so financially strapped and starved for higher paying jobs that they can't participate in our economy.

Tonight in Tom's Corner, Tom Van Howe says it's another example of our growing great, partisan shaped economic divide.

=====================

So many things in this world are the result of to whom you are born. At birth you don't choose whether you're going to be a Christian or a Jew or a Muslim. You don't choose to be poverty-stricken or wealthy. You don't get to choose the color of your skin. Nor whether you live winters in a deep freeze or in warmth and sunshine.

You pretty much become a product of your environment.

It's the accident of birth.

So  its nobody's fault that 70 percent of the college students in this country have to borrow money to chase dreams of being engineers, scientists, social workers, programmers, pharmacists, cops, prosecutors, defenders, entrepreneurs and so on.

So with the student debt burden up around $1.3 trillion, with the default rate approaching 15 percent, and with so many young people unable to buy homes, cars, start businesses--unable to participate in and contribute to our economy in any meaningful way--it stood to reason that our Congress  would ride in to the rescue.

Not to wipe our their debt. But to restructure it so students could save thousands of dollars with lower interest rates.

After all, we do it all the time. We want people to give to charity, so we offer tax breaks for donations; we want people to own homes, we devise tax breaks. We give deductions for children to encourage families. Corporations get tax breaks on things most of us can't comprehend.

And who needs the help more right now? The banks and lending companies that ran our country into the sewer a few years ago? Or young Americans who are going to be leading the charge in the years ahead?

I thought I knew the answer to that. But I was wrong.

The Senate shot it down. It needed 60 votes to carry--it got 58.

Senate Minority Leader Mitch McConnell, who surely must have come to us from some parallel universe, said "Senate Democrats don't actually want a solution for their students. They want an issue to campaign on."

Seems to me he just gave it to them.

Now, there was a catch to the bill that was introduced by Massachusetts Senator Elizabeth Warren: to take up any slack the refinancing of student debt might have created, the bill would have added a small tax on wealthy households. Not the kind of burden that would have altered anyone's life style.

"With this vote," Warren said, "we show the American people who we work for in the United States Senate: billionaires or students."

After years of speculation, now we know.

In this corner...I'm Tom Van Howe.

Business News

Last Update on September 02, 2014 07:31 GMT

EURO

LONDON (AP) -- The euro has fallen to a near one-year low against the dollar in the wake of soft European economic data and uncertainty over the crisis in Ukraine.

Europe's single currency fell to a low of $1.3119 after a survey Monday showed that the manufacturing sector across the 18-nation eurozone lost momentum in August. The euro hasn't been lower since early September of last year.

The main reason behind the euro's recent weakness has been a growing expectation that the European Central Bank may be considering a monetary stimulus to boost the ailing eurozone economy. In the second quarter, growth in the eurozone ground to a halt.

The crisis in Ukraine has also hobbled the eurozone's economic outlook. Uncertainty over how the conflict will turn out has made businesses hesitant to invest.

EUROPE-ECONOMIC RECOVERY

FRANKFURT, Germany (AP) -- Europe's economic recovery is in danger. Governments are under pressure to save it, but they are also struggling with political obstacles and disagreement among themselves over what to do.

Instead, the region is pinning its hopes -- once again -- on the European Central Bank, which is expected to launch new stimulus measures if the economy gets any worse.

Europe's lack of growth is looming larger and larger, however, and the ECB says it can't save the economy alone.

For more than five years since the eurozone hit turbulence over too much debt in 2009, governments' answer has been to raise taxes and restrain spending. And there's been some progress. Deficits have shrunk, and countries that needed bailout loans are slowly getting their act together.

But second quarter growth was zero, after only four quarters of measly expansion

CHINA-FOREIGN BUSINESS

BEIJING (AP) -- An American business group warns that foreign companies in China feel increasingly targeted for unfair enforcement of anti-monopoly and other laws and says investment might decline if conditions fail to improve.

The American Chamber of Commerce's report adds to mounting complaints about a flurry of investigations of global automakers, technology suppliers and other companies in recent months. Some foreign managers say Chinese authorities appear to be trying to hamper them and shield domestic rivals from competition.

The American Chamber of Commerce in China says almost half of companies responding to a survey "believe that foreign companies are being targeted." It said the risk was increasing that China "will permanently lose its luster as a desirable investment destination."

Uncertainty over regulatory investigations adds to challenges for foreign companies at a time when China's growth is slowing and they face more competition from ambitious local rivals.

OBAMA-ECONOMY

MILWAUKEE (AP) -- President Barack Obama is touting signs of a continuing emergence from the Great Recession, telling people in Milwaukee the nation's business engines, quote, "a revving a little louder."

The president has used a Labor Day address to put on a new push for increasing the federal minimum wage. Thirteen states have acted on their own to raise their minimum wages.

Until now, Obama and his White House aides had been reluctant to draw too much attention to positive economic trends, worried that some might not be real.

But in Milwaukee, he dared to say, in his words, "We're on a streak."

White House still insist that they are not yet declaring full victory over the lingering effects of a recession that officially ended five years ago.

FAST-FOOD PROTESTS

NEW YORK (AP) -- McDonald's, Wendy's and other fast-food restaurants are expected to be targeted with acts of civil disobedience that could lead to arrests Thursday as labor organizers escalate their campaign to unionize the industry's workers.

Kendall Fells, an organizing director for Fast Food Forward, said workers in a couple of dozen cities were trained to peacefully engage in civil disobedience ahead of this week's planned protests.

Fells declined to specify what is in store for the protests in roughly 150 U.S. cities. But workers recently cited sit-ins as an example of tactics they could use to intensify their push.

The "Fight for $15" campaign is being backed by the Service Employees International Union.

The National Restaurant Association called the protests attempts by labor groups "to boost their dwindling membership."

WEALTH GAP-DIET

CHICAGO (AP) -- A new study says Americans' eating habits have improved -- except among the poor.

Those results show a widening wealth gap when it comes to diet. Yet even among wealthier adults, food choices remain far from ideal.

The 12-year study used an index of healthy eating where a perfect score is 110. U.S. adults averaged just 40 points in 1999, and that climbed to 47 points in 2010. Scores for low-income adults were lower than the average and barely budged during the years studied.

Higher scores mean greater intake of heart-healthy foods including vegetables, fruits, whole grains and healthy fats. Low scores mean less of those foods and a greater chance for diet-related illnesses including diabetes, heart problems and obesity.

The study was published Monday in JAMA Internal Medicine.

TOYOTA-US HEADQUARTERS

RALEIGH, N.C. (AP) -- North Carolina business recruiters offered Toyota more than $100 million for the world's largest carmaker to move its North American headquarters to Charlotte rather than a Dallas suburb but still lost out to a Texas offer half that size.

Texas and local officials in the Dallas suburb of Plano offered Toyota less than $50 million.

Both Toyota and North Carolina Commerce Secretary Sharon Decker agree that the company's decision shows incentive money was just one of many considerations the company considered when deciding to move from the Los Angeles area.

North Carolina recruiting documents and emails released last week after a public records request show only about a quarter of the people filling nearly 3,000 jobs were expected to move from Southern California. The pay for those jobs averages $105,000 a year.

REVEL CLOSING

ATLANTIC CITY, N.J. (AP) -- The most spectacular and costly failure in Atlantic City's 36-year history of casino gambling has begun to play out as $2.4 billion Revel Casino Hotel empties its hotel.

The casino is scheduled to close Tuesday.

Revel is shutting down a little over two years after opening with high hopes of revitalizing Atlantic City's struggling gambling market.

But the business has been mired in its second bankruptcy in as many years, Revel has been unable to find anyone willing to buy the property and keep it open as a casino.

Analysts and competitors say Revel was hampered by business decisions including a total smoking ban, the lack of a buffet and daily bus trips to and from the casino, and the lack of a players' database from which to solicit customers.

advertisement
Washington Times
advertisement