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.

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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 March 30, 2015 07:27 GMT

ECONOMY-THE DAY AHEAD

WASHINGTON (AP) -- It's all about the consumer and housing early this week.

Today, the Commerce Department will release personal income and spending for February and the National Association of Realtors will report on pending home sales index for February.

On Tuesday, Standard & Poor's will issue the S&P/Case-Shiller index of home prices for January and the Conference Board will release the Consumer Confidence Index for March.

NABE ECONOMIC FORECAST

WASHINGTON (AP) -- A new survey finds economists are expecting much stronger growth this year and next.

The National Association for Business Economics survey finds' a median forecast of 3.1 percent growth in real gross domestic product in 2015, compared a 2.4 percent gain in real GDP last year.

NABE President John Silvia, who's also the chief economist of Wells Fargo, says there's promising news for jobs too. The panelists' median forecast is for net job creation to average approximately 250,000 per month in 2015 and 216,000 per month next year. NABE says the unemployment rate is expected to continue its downward trend over the next several quarters, reaching 5 percent by the second half of 2016.

As for what the Federal Reserve will do, Silva says 88 percent of the panelists believe the Fed will start tightening monetary policy in the second or third quarter of 2015.

AUTO SHOW-LINCOLN CONTINENTAL

DEARBORN, Mich. (AP) -- Elvis Presley had one. So did presidents from Kennedy to Reagan.

Now, the Lincoln Continental is back.

Ford Motor Co. is resurrecting the Continental with a concept car debuting at this week's New York Auto Show. The full-size sedan goes on sale next year.

The Continental dates to the late 1930s and was once the pinnacle of luxury. But Ford stopped producing it in 2002 when sales slowed.

Now, it's returning the Continental to the top of Lincoln's car lineup. The concept car has a new, smaller grille and a more elegant look. It also has new technology, including hidden door handles.

Ford hopes to take advantage of luxury sales growth in China, where customers appreciate Lincoln's history. It's opening more than 20 Lincoln dealerships in China this year.

AUSTRALIA-ASIAN BANK

CANBERRA, Australia (AP) -- Australia has announced that it will join negotiations to establish a new a Chinese-led Asian regional bank.

The U.S. has expressed concern the new Asian Infrastructure Investment Bank, or AIIB, will allow looser lending standards for the environment, labor rights and financial transparency. The U.S. also worries the new bank will undercut the World Bank, where the U.S. has the most clout, and the Asian Development Bank, where it is the second-largest shareholder after Japan.

Prime Minister Tony Abbott, Foreign Minister Julie Bishop and Treasurer Joe Hockey said in a joint statement on Sunday that the government will sign a memorandum of understanding that will allow Australia to participate as a prospective founding member in negotiations to set up the bank.

DUKE ENERGY-CEO

RALEIGH, N.C. (AP) -- Duke Energy's CEO is paying a price for a massive spill of collected coal ash that coated 70 miles of a North Carolina river in sludge containing toxic heavy metals.

An annual statement released ahead of the Charlotte-based company's May shareholder meeting says Chief Executive Officer Lynn Good's $8.3 million compensation in 2014 was cut by about $600,000. The top financial officer and three other executives saw similar 35 percent reductions in compensation tied to annual performance.

Directors of the country's largest electric company said in the company proxy statement released this week that the executives were docked because the spill will cost Duke Energy more than $190 million in cleanup, legal fees, and fines to settle a pending criminal case involving Clean Water Act violations.

BRITAIN-MENINGITIS VACCINE

LONDON (AP) -- Britain says it will become the first country to offer all babies a vaccine for potentially fatal meningitis B after it reached a price deal with GlaxoSmithKline PLC.

Government health advisers recommended use of the Bexsero vaccine last year, and the government has spent months negotiating over the cost.

The drug was owned by Novartis, which recently sold most of its vaccines business to GlaxoSmithKline.

Health Secretary Jeremy Hunt said Sunday he was "very proud that we will be the first country in the world to have a nationwide Men B vaccination program."

Babies will receive the vaccine at two months, followed by two further doses.

Meningitis is a bacterial infection of the lining surrounding the brain and spinal cord that most commonly affects children and teenagers.

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