Where does the government get the money to pay for student loans?
From those students' grandchildren. The students themselves will never make enough to pay the new public debt required to subsidize rates on top of the old debt for everything else. Keeping rates at their temporarily (sic) low level, however, is hoped in the white house to be a match with which to rekindle Obama's popularity in the college set in time for this election, and that's its only purpose.
But where does the money come from, how do they get it before those grandchildren are born. I understand that later generations will be paying, but how do they get the money beforehand?
They borrow what they can. Or they will as long as they can find anyone still willing to loan them more. The monstrous debt run up by the Obama administration has trimmed the pool of lenders. What can't be borrowed is monetized.
I've heard that the government is printing more and more money.
That is the answer I was looking for, What they can't tax for, they borrow, what they can't borrow they print. All making the economy worse for Joe Smoe.
The government is borrowing the money from China to function. Meanwhile, the government is giving money away in the billions to places like Egypt, to keep their military going; Pakistan to rebuild; and Afghanistan to make more terrrorists.
it a loan, it MAKES MONEY FOR THE GOVERNMENT and it at now 3% and after this year it goes back to 6.9%. but the real problem is the cost of school. is it debt you have worth it. and they get the money with and though the backing of the United States citizens.
Yeah, but there are a lot more people taking out loans then are paying them back. Most students aren't able to pay for the loans they receive because they can't find a job after they graduate.
But my question was where does the money come from?
though the representation of the people by taxes, loans and bonds and from the federal government resources of other countries.
It borrows against itself, like a bank. They are just loans, not gratuities. The government expects to be paid back. the Department of Education does not spend all that much. Where does the money come from to cover our defense budget?
Exactly the same place: our grandchildren. Well, after this administration, our great-grandchildren.
My point was the money doesn't exist. They have to print it, cause inflation, and push prices up such as tuition prices. Just like the housing bubble, there is a student loan bubble. Tax payers will be expected to pay.
The amount of interest on the loan is minimal. However, the ability to have educated citizens who are successful, pay taxes on many different levels, as well as create businesses and jobs is a huge return on this investment.
Well our education system is horrible. College students are coming out of college in debt and can't find a job. I used to work at a restaurant and half the servers had college degrees. I don't see the return, all I see is debt and poor education.
The government basically creates money out of whole cloth. Personally, I don't think a college education is worth it anymore...perhaps medical school or a trade school, but definitely not a liberal arts education.
The government knows that circumstances often lead many into the colleges and universities. Once there, the universities sell the students hope. Once out, the students that are not connected into the social pipeline will find out that they were sold false hope, and will become enslaved to debt and the Federal government.
The government really doesn't care about the money - but what it does care about is control. Those who owe are easily controlled and manipulated.
Technically they don't pay for it. They have the FED print money, that is worthless, it isn't backed by anything besides 0's in a computer. Then students try to pay off the debt for the rest of their lives or at least 25 years. Where most students can finally quit paying them.
From taxpayers and, increasingly, through money loaned by China by buying our Treasury notes.
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