Unexpectedly Intriguing!
June 21, 2017

The U.S. government passed a unique milestone in May 2017, where it has now cumulatively borrowed more than $1 trillion from the public since President Obama was sworn into office in January 2009, just so it can loan the money back out to Americans who need to borrow money to go to college in the form of Federal Direct Student Loans.

Money Borrowed by the U.S. Government to Finance the Federal Direct Student Loan Program, FY 1998 (October 1997) through FY 2017 (May 2017)

President Obama is directly responsible for this state of affairs. After being sworn into office on 20 January 2009, his first major domestic policy act was to sign the American Recovery and Reinvestment Act of 2009 into law on 17 February 2009 in an attempt to jump start a U.S. economy that had fallen into deep recession. Better known as the "Stimulus Bill", the act boosted the subsidy amount and quantity of Pell Grants paid to low and middle income-earning Americans attending college, but not by enough to cover more than one-third of the average annual cost of a university education, where American students who received these grants would then have to make up the difference through taking out student loans that are subsidized by the U.S. government.

Then, on 30 March 2010, President Obama signed the Health Care and Education Reconciliation Act of 2010, which resulted in the U.S. government taking over the student loan industry from the private sector.

President Barack Obama signed a law Tuesday that he said will end subsidies for banks that guarantee federal student loans, saving $68 billion over 11 years by making loans directly through the U.S. Department of Education. 

The overhaul of the student loan industry is part of the Health Care and Education Reconciliation Act of 2010, which was passed by Congress to reform the nation's health care system. 

According to the White House, starting July 1 all federal student loans will be direct loans administered through private companies that have performance-based contracts with the DOE. 

At present, the law appears set to fail on delivering these promised savings to U.S. taxpayers. For that portion of the story, please scroll down and click through!...

Previously on Political Calculations

U.S. Student Loan Implosion - We looked at the Federal Direct Student Loan program from the perspective of the student borrowers, where $137 billion worth of loans that have come due are either delinquent (more than 90 days without any payment being made) or are in default (more than 270 days without any payment being made).

Labels: ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Applications

This year, we'll be experimenting with a number of apps to bring more of a current events focus to Political Calculations - we're test driving the app(s) below!

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button

JavaScript

The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links
Charities We Support
Recommended Reading
Recommended Viewing
Recently Shopped

Seeking Alpha Certified

Archives
Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.