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 August 19, 2014 17:11 GMT

CONSUMER PRICES

WASHINGTON (AP) -- U.S. consumer prices rose in July, at the slowest pace in five months.

The Labor Department says consumer prices edged up a seasonally adjusted 0.1 percent last month, after larger gains of 0.3 percent in June and 0.4 percent in May.

The July price restraint came from falling gasoline prices, which had surged in June. All energy prices were down 0.3 percent and this helped offset a 0.4 percent rise in food costs, which have been pushed up by adverse weather including a drought in California.

Over the past 12 months, consumer inflation is up 2 percent while inflation excluding food and energy is up 1.9 percent. Price gains around 2 percent are considered moderate and meet the 2 percent inflation target set by the Federal Reserve.

Analysts believe overall prices will moderate further in coming months, helped by moderation in energy costs.

HOME CONSTRUCTION

WASHINGTON (AP) -- U.S. home construction rebounded in July, rising to the fastest pace in eight months and offering hope that housing has regained momentum after two months of declines.

The Commerce Department says construction increased 15.7 percent in July to a seasonally adjusted annual rate of 1.09 million homes. That was the fastest pace since November and followed declines of 4 percent in June and 7.4 percent in May.

Applications for building permits, considered a good sign of future activity, also showed strength in July, advancing 8.1 percent to an annual rate of 1.05 million, after declines of 3.1 percent in June and 5.1 percent in May.

The July rebound reflected strength in single-family home construction, which rose 8.3 percent, and in apartment construction, which was up 33 percent.

EARNS-HOME DEPOT

ATLANTA (AP) -- Home Depot's fiscal second-quarter net income increased 14 percent thanks to a rebound in its spring selling season.

Spring is the biggest season for home-improvement retailers, as homeowners and others work on their yards and gardens. While the season started off a bit cold and rainy, weather improved and shoppers headed out to stores to pick up supplies.

For the three months ended Aug. 3, Home Depot Inc. earned $2.05 billion, or $1.52 per share. A year earlier it earned $1.8 billion, or $1.24 per share.

Home Depot's stock gained $2.53, or 3 percent, to $86.12 before the market open.

Revenue climbed nearly 6 percent to $23.81 billion from $22.52 billion. This beat Wall Street's forecast of $23.57 billion.

EARNS-DICK'S

CORAOPOLIS, Pa. (AP) -- Dick's Sporting Goods says its net income fell 17 percent in its fiscal second quarter, but its result still beat analysts' expectations and its shares rose in premarket trading.

The sporting goods retailer says it cut jobs in its golf business because of weaker demand for golf gear and services, but it doesn't say how many employees were let go.

The company says profit fell in the second quarter to $69.5 million from $84.2 million in the same quarter a year ago.

Earnings, adjusted for restructuring costs, came to 67 cents per share. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 65 cents per share.

Shares of Dick's Sporting Goods rose 5.7 percent to $45.97 in premarket trading today.

EARNS-TJX

FRAMINGHAM, Mass. (AP) -- TJX says its second-quarter net income climbed 8 percent as sales strengthened in the U.S. and abroad.

The results for the parent company of T.J. Maxx, Marshalls and other stores topped Wall Street's view. TJX also lifted its full-year earnings forecast, citing its better-than-expected second-quarter performance.

TJX earned $517.6 million for the period ended Aug. 2. That compares with $479.6 million a year earlier.

RECARO-CHILD SEAT RECALL

DETROIT (AP) -- Recaro is recalling more than 39,000 child safety seats because they can let a child's head move too far in a crash.

The recall covers ProSport model 385 seats made from June 16, 2010, to Jan. 31, 2013. The problem happens when the seats are installed with the lower latch anchors and without the top tether.

Recaro will notify owners and provide set of new instructions telling owners not to use the lower latch system with a child weighing 40 or more pounds. The company also will send a new instruction label for the seat.

The problem was discovered in testing by Recaro. The company says in documents sent to U.S. safety regulators that it cannot determine if the problem caused any injuries.

BRITA-RECALL

WASHINGTON (AP) -- Brita is recalling more than 242,000 children's water filter bottles because the bottle lid can break or crack, possibly causing serious cuts.

Brita has received 35 reports of lids breaking or cracking, but no injuries have been reported.

The recalled bottles are a violet bottle with Dora the Explorer, a pink bottle with Hello Kitty, a blue bottle with SpongeBob Square Pants and a green one with Teenage Mutant Ninja Turtles.

Each bottle has a Brita logo and white lid. And they're 6 inches tall and hold 15 ounces of liquid.

Consumers can return the bottles for a full refund. Information is at www.brita.com .

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