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 September 18, 2014 07:45 GMT

WORLD MARKETS

SEOUL, South Korea (AP) -- Asian stock markets mostly fell today after the U.S. Federal Reserve increased its estimate for the level of the central bank's benchmark interest rate by the end of 2015, surprising investors who expected a slower pace of rate hikes.

Hong Kong's Hang Seng was down 0.7 percent to 24,199.87 and South Korea's Kospi dropped 0.8 percent to 2,046.53.

Australia's S&P/ASX 200 declined 0.1 percent to 5,399.60.

Stocks in New Zealand and mainland China also fell but Japan's Nikkei 225 rose 1.3 percent to 16,099.30 as the yen weakened.

ECONOMY-THE DAY AHEAD

WASHINGTON (AP) -- There are two government reports due out today.

The Labor Department will release data on the number of people who applied for unemployment benefits last week. For the previous week, slightly more Americans sought benefits, but the total number receiving aid remained at a seven-year low.

The Commerce Department reports on U.S. home construction in August. In July, construction rebounded to an eight-month high, offering hope that housing had regained momentum after two months of declines.

Also today, Freddie Mac will release average mortgage rates for this week. Last week, the average for the 30-year loan edged up to 4.12 percent from 4.10 percent the previous week. At 4.12 percent, the average rate is still down sharply from 4.53 percent at the start of the year.

`And Federal Reserve Chair Janet Yellen will speak today on the importance of asset building for low- and middle-income households at a conference of the Corporation for Enterprise Development in Washington.

JAPAN-TRADE

TOKYO (AP) -- Japan has logged a 948.5 billion yen ($8.8 million) trade deficit in August, the 26th straight month of red ink, as weak demand at home hit imports while exports also fell.

The Finance Ministry reported Thursday that exports fell 1.3 percent from a year earlier to 5.71 trillion yen ($53.3 billion) while imports dropped 1.5 percent to 6.65 trillion yen ($62.1 billion).

A weakening in the value of the Japanese yen has so far failed to spur a rebound in exports, despite nascent recoveries in the U.S. and Europe. Slower growth in China, Japan's biggest trading partner, has also hurt.

But consumer spending inside Japan has been lackluster since an April 1 sales tax, reducing demand for imports. Weaker oil prices have also cut costs for imported oil and gas.

TOY MANUFACTURING

BURNHAM, Maine (AP) -- Lincoln Logs, the popular toy created nearly a century ago by the son of famous architect Frank Lloyd Wright, is coming home to the U.S.A.

Maine Gov. Paul LePage announced Wednesday the toy logs, created by John Lloyd Wright and used to create miniature toy buildings, will be made at Pride Manufacturing, a wood products company in Burnham.

The toy has been made in China. But Pride Manufacturing officials say that when production of the wooden pieces ramps up, possibly in November, 80 percent of the toy will be made at the plant in Maine.

Some plastic pieces will still be made in China.

Hatfield, Pennsylvania-based K'NEX currently holds the product license.

ROCKET ENGINES

WASHINGTON (AP) -- Amazon.com founder Jeff Bezos plans to build a rocket engine that would eventually replace the Russian mainstay used in many American unmanned launches.

United Launch Alliance, a collaboration of two aerospace giants that launches unmanned rockets, announced Wednesday that it will pay Bezos' Blue Origin space firm to develop new rocket engines. In about four years, the launch alliance hopes to start using the new engines in Delta and Atlas rockets.

Some experts worry that tensions over Ukraine might interrupt the supply of Russian engines, but alliance chief Tory Bruno said that's not a problem.

Bezos said he will proceed with plans for his private human space capsule to launch later this decade. However, Bezos' firm wasn't picked Tuesday by NASA for its $6.8 billion private space taxi program.

USDA-WEED KILLER

WASHINGTON (AP) -- The Agriculture Department is approving the use of genetically modified corn and soybean seeds that are resistant to a popular weed killer.

However, farmers won't be able to take full advantage of the seeds until the Environmental Protection Agency issues a second ruling allowing the use of Enlist, a new version of the 2,4-D weed killer that's been around since the 1940s. The EPA has said it will rule this fall on Dow AgroSciences' application to market the chemical.

The agriculture industry has been anxiously awaiting the approvals, as many weeds have become resistant to glyphosate, an herbicide commonly used on corn and soybeans now.

Critics say they are concerned the increased use of 2,4-D could endanger public health and that more study on the chemical is needed.

APPLE-IOS BUG

NEW YORK (AP) -- A bug in Apple's new iOS 8 software for mobile devices is prompting the company to withhold apps that use a highly touted feature for keeping track of fitness and health data.

Apple says it hopes to have HealthKit apps restored to its app store by the end of the month. Affected apps include Carrot Fit, WebMD and AskMD. Apple didn't provide details on what went wrong.

The iOS 8 software became available Wednesday. HealthKit is supposed to create a central repository for health and fitness data, so that apps have a better picture of your overall wellness and can even recommend trips to the doctor.

Apple's new iPhones have sensors to monitor fitness activities, and its upcoming Apple Watch will have a heart-rate monitor.

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