Too many of the private lenders are crooks. If this is done right - it would be a good thing. My concern? What are the odds dems will do it right? ( Hint: wrong is giving the crooks in higher education a carte blache... )
Why do you say private lenders are crooks? My sister works in the student loan dept of a bank and said the dems voted to change the rate structure of loans two years ago and that is why so many private lenders have dumped their student loan departments - Congress is the problem - they got their filthy hands in there and screwed it up for everyone. There is no way student loans will be any cheaper or easier to get throught the government -
Just so you know, this isn’t a NEW program they are proposing. It’s an existing program, and has been around since the early 1990s. It was started in 1992 or 1993, and was supposed to be phased in to take over all student lending. When the GOP took over Congress in 1994, it was slowed down.
Currently each school chooses whether they want to participate in the Direct Loan program, or the Federal Family Educational Loan Program (commonly known as Stafford). The two loans are essentially the same - same loan limits, same requirements and terms. The only difference is the origin of the funds - either from a bank or from the feds.
Currently I believe about 35% of schools are in the Direct Loan Program, with the rest in FFELP. Those numbers may be a bit off, as there were a lot of schools that made a quick switch to Direct Loans when the credit market started to freeze up last summer.
My point: this isn’t a NEW program. It’s an existing one that’s been tested and works for more than 15 years. Whether or not it could handle the full weight of loans for all schools is debatable, and I don’t see the lending industry allowing it to happen. Though literally hundreds of banks have gotten out of student lending in the past year, anyway, so maybe Sallie Mae (which is just an evil company) will be the only ones who care.
(Disclaimer: I am a financial aid professional at a graduate school.)