The Obama administration told House lawmakers Thursday that participation by private lenders should be curtailed in the federal student-loan program because the government “is now the sole reliable and sufficient source of federal student-loan capital.”
For federal student loans, the president has proposed ending private lender subsidies through the Federal Family Education Loan Program, and using federal funds to originate all new loans beginning in the 2010-2011 academic year through the government’s Direct Loan program.
While the administration says this step would save money, theprivate-lending industry warns that students’ access to loans could bedisrupted, according to witness testimony at a House hearing onThursday.
“Instead of maintaining this elaborate web of programs designed to propup the [Federal Family Education Loan] Program, we should originate100% of new loans through the less costly Direct Loan program,” saidRobert Shireman, deputy undersecretary of the Department of Education,at the hearing of the House Education and Labor Committee.
From a reader: A modest proposal. Since academia, a bastion of political correctness, seems to be so in favor of Obamania, perhaps it will agree to a cap on tuition. After all, despite being all about egalitarianism, colleges are some of the most expensive places in America, with tuition soaring even as the real value of degrees declines, thanks in large part to the largely useless social engineering courses kids are subjected to. Such a proposed tuition cap could be voluntary…for now.