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 October 20, 2014 07:27 GMT

BUSINESS SURVEY

WASHINGTON (AP) -- A new business survey finds hiring is healthy but pay raises, not so much.

The quarterly survey by the National Association for Business Economics finds that only 24 percent of companies increased wages and salaries in the July-September quarter. That's down from 43 percent in the April-June quarter and the first drop after three straight increases.

Yet the firms still added jobs at a healthy pace, which usually pushes wages higher as employers compete for workers. The figures suggest that the number of people out of work remains high enough that companies aren't under any pressure to raise pay.

And just one-third of respondents said they expect their companies will boost wages in the October-December quarter.

The NABE surveyed 76 of its member economists in late September

ECONOMY-THE DAY AHEAD

UNDATED (AP) -- Investors will have many more corporate earnings reports to look at this week.

Apple will report third quarter financial results today after the market closes.

Tomorrow, Coca-Cola, Reynolds American, Verizon Communications and McDonald's will report earnings before the market opens. Discover Financial Services and Yahoo will report results after the closing bell.

Also on Tuesday, the National Association of Realtors will release existing home sales for September.

SPRINT LAYOFFS

OVERLAND PARK, Kan. (AP) -- Sprint Corp. has cut 452 jobs from its Overland Park, Kansas, headquarters as part of a previously announced cost-cutting effort.

The nation's third-biggest cellphone carrier disclosed the layoffs in a filing with the Kansas Department of Commerce.

The report, which was filed Friday, covers the first installment of layoffs planned throughout October. The Kansas City Star reports that it doesn't cover any job losses outside the headquarters campus, although they are believed to be happening too.

The company said earlier this month in a filing with the Securities and Exchange Commission that it was cutting an unspecified number of jobs to better compete with AT&T and Verizon. Sprint said it would book a $160 million charge in its fiscal second quarter to cover the layoffs, which include managers as well as other employees. It may take more charges for future job cuts.

Another 477 Sprint employees in Overland Park were laid off earlier this year, bringing this year's job cut total to 929

Before the newly disclosed layoffs, about 7,500 worked for Sprint in the Kansas City area.

BOX OFFICE

LOS ANGELES (AP) -- The bloody World War II drama "Fury" blew past "Gone Girl" at theaters this weekend.

"Gone Girl" was tops at the box office for two weeks before Brad Pitt and his rag-tag group of tank mates in "Fury" blasted the film to second place.

According to studio estimates Sunday, Sony's "Fury" captured $23.5 million in ticket sales during its opening weekend. Fox's "Gone Girl" followed with $17.8 million.

Two other new movies landed in the top five: The animated Fox feature "The Book of Life" opened in third place with $17 million; and Relativity's Nicholas Sparks romance "The Best of Me" debuted in fifth place with $10.2 million.

Disney's "Alexander and the Terrible, Horrible, No Good, Very Bad Day" placed fourth, dropping one spot since opening last weekend.

JAPAN-TRADE MINISTER RESIGNS

TOKYO (AP) -- Japan's trade minister has announced her resignation after allegations that she violated election laws.

Yuko Obuchi's resignation on Monday is the first for the current administration of Prime Minister Shinzo Abe and could dent his efforts to raise the profile of women both in politics and business.

The questions over Obuchi's use of election funds are the latest in a series of uproars over activities by some members of Abe's Cabinet. Obuchi is one of five women Abe appointed to Cabinet-level posts in a reshuffle last month that highlighted his commitment to promoting women to leadership positions.

GERMANY-ECONOMY

BERLIN (AP) -- Germany's finance minister says he's confident he can keep promises to balance the budget next year and is rejecting anew suggestions that the country should borrow to finance greater public investment.

Chancellor Angela Merkel is determined to stick to plans to get by without new borrowing next year for the first time since 1969, though Germany's growth outlook has weakened and Berlin faces calls from abroad to pump money into the economy.

Finance Minister Wolfgang Schaeuble acknowledged in Sunday's Welt am Sonntag newspaper that Germany "must invest more and improve our competitiveness." But he added: "We just don't want growth on credit."

Schaeuble said it's important to keep to promises and says he's confident a balanced budget can be achieved because "tax income doesn't react so quickly to economic changes."

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