Lenders Sought Edge Against U.S. In Student Loans

[gulliver]

Source: NYT

In a fierce contest to control the student loan market, the nation’s banks and lenders have for years waged a successful campaign to limit a federal program that was intended to make borrowing less costly by having the government provide loans directly to students.

The companies have offered money to universities to pull out of the federal direct loan program, which was championed by the Clinton administration. They went to court to keep the direct program from becoming more competitive. And they benefited from oversight so lax that the Education Department’s assistant inspector general in 2003 called for tougher regulation of lender dealings with universities.

...

President Bush’s budget reports that in 2006 for every $100 lent by private lenders, the cost to the government of subsidies, defaults and other items was $13.81, while the same loan through the direct loan program cost the government $3.85. The battle for dominance in the loan market has escalated as tuitions have soared and students have borrowed more. This is the context for many of the payments to universities and financial aid officials that have come to light as a result of recent investigations into student loan practices.

“What has happened is unbridled competition meets lack of oversight,” said Terry W. Hartle, senior vice president at the American Council on Education.

Read more: http://www.nytimes.com/2007/04/15/education/15direct.html?hp

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Hide your wallet. More GOP fun and games.

[The Count]

1. No cronie left behind

[Joanne98]

2. Now this will really piss off the middle class! k&r

[izzie]

3. Now this is not a shock to me. Banks business is making money

It is not as if they are a living thing with a heart. They just fall under being a person for taxes.