I read in the Huffington Post that [Obama’s Education Secretary] Arne Duncan is really focusing on getting private lenders out of the federal lending business for student loans.
What? you say, maybe even if you are an American. Yes, that’s right. There is a lending industry out there that acts like it’s private enterprise, even though it is a government-funded lending scheme. The students borrow from it in order to go to college.
Why? In America, many–maybe most– students borrow to go to college because the tuitions are priced pretty steep. The colleges then raise the tuition prices even more, so that the students have to go back to the government and borrow more money.
Even if the source of this money is private investment –which used to be the case up until the 2000’s — the government has always covered ffor principal loss to these firms. So it’s no different than if a government bond were being issued. Nowadays, the government is the actual source of the lending capital. So all the student loan “industry” is doing is touching the check before it goes out to the student (and to the college).
Just touching a government check? How does that make it private enterprise.
But the “industry” wants $87 billlon to do this over the next 10 years. And the Republicans used to give it right to them . . .