|
For Immediate Release
August 27, 2004
GEORGE W. BUSH USES FEDERAL COLLEGE AID TO PAD CORPORATE PROFITS & BLOCK ACCESS TO COLLEGE
Today, we learned more about a special interest favor George W. Bush is doing for banks administering student loans. Currently, the federal government pays banks to provide loans to students with a government-guaranteed rate of return. But instead of providing a reasonable rate of return, a loophole in the law gives many banks a guaranteed return of 9.5%. With no risk whatsoever, these banks receive a massive subsidy of nearly $1 billion annually straight from taxpayers – money that could be used to expand college access.
Vice-Presidential nominee John Edwards said: “If we had real leadership in the White House, we could close this loophole tomorrow. And we could take that money and give it to students who desperately need help. That is what John Kerry will do as President.”
Keeping The Loophole Open Will Cost $2.8 Billion Next Year. If the loophole isn’t closed until next year, the Institute for College Access and Success estimates that the government will spend $2.8 billion in subsidies to pad corporate profits instead of expanding college access. (New York Times, 8/27/04)
Bush And The Education Department Could End Guaranteed Profits Today. The president or officials at the Education Department could end the program and close the loophole at any time. "It is the agency's rules that created the loopholes," said Robert Shireman, director of the Institute for College Access and Success, which published a report today with findings similar to the G.A.O.'s. "It is the agency's responsibility to fix them. It is irresponsible not to act." (New York Times, 8/27/04)
“Everyone's Rushing In Before The Door Closes," said industry analyst Matthew J. Snowling. Almost half the lenders have expanded their portfolios of guaranteed loans in recent years; the volume of loans has quadrupled in just three years. Southwest Student Services Corporation, for example, has more than doubled its holdings of government guaranteed loans in the last two years to $650 million. (New York Times, 8/27/04)
Bush Won’t Stop Giving Government Money To His Corporate Friends. While government subsidies have exploded, the New York Times reports that the Bush administration has strong political connections to lenders. “Indeed, (Don R.) Bouc was appointed by the department to serve on a financial aid advisory committee.” And quarterly payments from the government to his company have expanded more than ten-fold since the end of 2002, from $4.6 million to more than $48 million in June. (New York Times, 8/27/04)
-30-
www.johnkerry.com
Paid for by Kerry-Edwards 2004, Inc.
|
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
