Study: 44% of social security users say "No, I have not used a gov. social program."

[Tellos Athenaios]

Student loans are welfare, even if they are not a gift. They're an investment from society into itself which is what welfare is all about: a system of rules that taps riches from its individuals (taxes) to redistribute them as an investment in itself. Be that to prevent people from starving/going hungry (food stamps) to student loans which are much more akin to how a venture capitalist bankrolls a start up. You have to remember that these loans are to be had even for people who would otherwise never persuade any financial institution to lend them equivalent amounts of money.

Student loans in Australia are from the government. You have to pay them back once you start earning over a threshold amount and for most the interest is indexed ie CPI only.

Here it's 2 years after you end your studies, with a monthly amount calculated over your tax-able income 2 years prior. Thus if you earned virtually nothing (i.e. student job) you start with something like €100,- a month. When you get a manage to maintain a proper job, 2 years later you will find the monthly amount to be something like say €500. It may be that in the USA the interest rates are comparatively harsh (here it's 2.4%), and you are liable until the day you die (here the remainder might be waived after 10 or so years I think).

For reference, IIRC a bachelor's programme is about €1800,- a year after subsidy and a master's program can be about €5000,- after subsidy a year to pay the institution alone (but you only have to pay a single institution thus if you attend two you only owe one of them a fee if you can provide a proof of enrollment to the other) that is quite some loan: the actual costs of a University for students outside of the EU could be about €10K a year for a bachelor's programme.

[Major Robert Dump]

Welfare by definition does not have to be paid back. Student loans do. Student loans make some peoples lives significantly more difficult than had they not gotten the loans or the education. The loans are not always subsidized by the fed and the " guarantee" only comes into play of the borrower defualts, at which point the fed buys the loan from the lender and then the fed comes after the borrower. Giving a high risk borrower a line of credit is not welfare. The lenders don't lose. Calling a student loan welfare is like calling a high risk borrower credit card with 35% interest welfare

[Strike For The South]

Wait.....

IT HAS TO GET PAID BACK

[Slyspy]

I would say that a student loan absolutely is welfare if the capital sum comes from a government source. The fact that it has to be paid back is irrelevant IMO. You don't have the money, the government provides the money.

[Papewaio]

Well if you go for a broad definition then every Australia who successfully scores high enough to get into a course (without paying to do so if they scored too low) will have used welfare... as not only do you get the loan which is CPI... you are only paying a portion of the total course costs (not the whole) as such you have a subsidy and therefore are on welfare.

Essentially the student has to pay a percentage of the course costs back in the form of a CPI load and the rest of the course is payed out right by the Federal government. Then again it's expected the increased overall tax base more then makes up for this.

=][=

The other option until 2009 was if you're a dumb lazy fire truck with rich parents then you can pay a full fee and get into the course of your choice.

[Ronin]

Tea Party embraces keynesianism now

The Rise of Tea Party Keynesianism
Spending money on defense is good because it creates jobs and stimulates the economy -- wait, what?!

the corporate masters that started the whole thing have pulled the leash it seems.

[Major Robert Dump]

I would say that a student loan absolutely is welfare if the capital sum comes from a government source. The fact that it has to be paid back is irrelevant IMO. You don't have the money, the government provides the money.

It doesn't come from a government source. Student Loans come from banks, like Sallie Mae, not the government. The government just "backs" the loan up by promising the bank they will buy the debt if the borrower turns out to be a doucehbag, therefore the bank is more likley to give the loan to undeserving borrowers because there is little or no risk involved for the bank.

That's what people seem to not understand about the US Governement: They don't pay for stuff like this themselves, they always include a bank, that way some honest, hardworking, starving banker can make some money. Obamacare doesn't pay for people's healthcare, Obama pays insurance companies to pay for somoenes healthcare, that way some honest, hardworking, starving insurance agent can make some money. Stimulus funds work the same way.

[Slyspy]

It doesn't come from a government source. Student Loans come from banks, like Sallie Mae, not the government. The government just "backs" the loan up by promising the bank they will buy the debt if the borrower turns out to be a doucehbag, therefore the bank is more likley to give the loan to undeserving borrowers because there is little or no risk involved for the bank.

That's what people seem to not understand about the US Governement: They don't pay for stuff like this themselves, they always include a bank, that way some honest, hardworking, starving banker can make some money. Obamacare doesn't pay for people's healthcare, Obama pays insurance companies to pay for somoenes healthcare, that way some honest, hardworking, starving insurance agent can make some money. Stimulus funds work the same way.

So without the government backing the student loan would be unavailable or on less friendly terms?

Edit:

Has Sallie Mae always been a private company?

[Tellos Athenaios]

It doesn't come from a government source. Student Loans come from banks, like Sallie Mae, not the government. The government just "backs" the loan up by promising the bank they will buy the debt if the borrower turns out to be a doucehbag, therefore the bank is more likley to give the loan to undeserving borrowers because there is little or no risk involved for the bank.

Ah. So that is different from student loans as we know it over here, which are directly paid out by the government, and likewise the interest on the borrowed money ends up on the government balance sheets. And no, I don't see why anyone would do it any other way. Seems like it merely serves to introduce overhead, and make the whole thing worse by going through the private sector for this.

[Tuuvi]

It doesn't come from a government source. Student Loans come from banks, like Sallie Mae, not the government. The government just "backs" the loan up by promising the bank they will buy the debt if the borrower turns out to be a doucehbag, therefore the bank is more likley to give the loan to undeserving borrowers because there is little or no risk involved for the bank.

That's what people seem to not understand about the US Governement: They don't pay for stuff like this themselves, they always include a bank, that way some honest, hardworking, starving banker can make some money. Obamacare doesn't pay for people's healthcare, Obama pays insurance companies to pay for somoenes healthcare, that way some honest, hardworking, starving insurance agent can make some money. Stimulus funds work the same way.

Actually, the US government ended the Stafford loan program and replaced it with Direct loans, which come directly from the government. They also bought up any stafford loans that had been taken out before they started doing Direct loans.