Posted on 03/21/2025 10:27:00 PM PDT by Dr. Franklin
On the heels of his announcement that he plans to close the Department of Education, President Donald Trump said Friday that his administration will move the federal student-loan portfolio to the Small Business Administration in an effort to manage the program better. But experts warn that any move — should it withstand legal challenges — would likely create headaches for borrowers.
“I’ve decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, who is a terrific person, will handle all of the student-loan portfolio,” Trump said Friday. “We have a portfolio that’s very large, lots of loans, tens of thousands of loans, pretty complicated deal. That’s coming out of the Department of Education immediately.”
He added: “It will be serviced much better than it has in the past. It’s been a mess.”
The Office of Federal Student Aid, which oversees the student-loan portfolio, is by law a unit of the Education Department. Any steps administration officials take toward moving it will likely face legal challenges. In a statement, Loeffler acknowledged lawmakers’ role in the shift, saying the SBA is “prepared to work with Congress and the Administration to bring accountability back to America’s student-loan program.” ... Although the SBA lends to small businesses, Bergeron said it seems like an odd fit for the student-loan portfolio. The SBA works with fewer borrowers than the Department of Education, and its individual loans are larger on average than the typical student loan. The repayment terms also generally are not as complicated as the options available to student-loan borrowers.
...
In her statement, Loeffler touted the agency’s experience. “As the government’s largest guarantor of business loans, the SBA stands ready to deploy its resources and expertise on behalf of America’s taxpayers and students,” she said.
(Excerpt) Read more at msn.com ...
Article should prominently name the “expert”, so we can determine the extent of stated, expertise.
KILL THE GOV’T CONTROL OF STUDENT LOANS.
Let the private sector decide who should get a loan for crazy priced tuition to study personal genital mutilation.
How about this, get the Federal government out of the college student loan business and sell the current loans to a private bank or investment company.
If the colleges n universities had to finance their student’s loans. They would be more academically selective of who got the loans, if student’s degree is capable of repaying the loan n mitigate degrees with narrow career paths.
Seems like a good fit!
Students are one of our important businesses...
It’s a bit more complicated than that. By any rationale, 80% student loans are inherently sub-prime.
They’re high risk unless the course guarantees a six figure salary within five years of graduation.
What you’ve got, in effect, is a ridiculously overpriced tertiary education sector, where a degree that’ll get you a low rank job costs more to study than the wage would’ve been to go in at postroom and work your way up.
Universities privatise the profits but socialism covers the risk. It’s a license to print money and keep the state involved.
Rather like the ludicrous American healthcare system, where you pay ten times as much for a prescribed drug as the full retail price, or a scheme like Medicare ends up paying it, simply because there’s a pointless industry of insurance middlemen gouging everybody else.
All loans will be treated the same - the DEI ones won’t be easily cancelled or ‘lost’. That’s my guess. This is a good move.
Excellent.
Then this means it’s a good move.
Just get us taxpayers out of the loan business.
The federal government has no legitimate reason to be handing out taxpayer money to individuals.
Put the loan business back in the hands of banks and financial institutions.
That’s what I think should happen, too.
Universities, colleges and industries could have their own financing - loans, grants and scholarships.
would likely create headaches for borrowers.
How so?
They might have to pay their payments every month?
Maybe they have to send it to another address?
Nor should it be costly to change agencies...its all digital anyway.
The article seems like more bs.
The universities with thier huge endowments and the DOE need to be forced to pay for the scam they have been running on parents and students
Easily the number one reason for spiraling increases in college tuition. A business selling a product on credit to a consumer guaranteed to qualify to borrow full amount of purchase price from lender with unlimited funds and no credit check. What could go wrong? Those market conditions make it collegiate malpractice not to raise tuition every year.
I don’t think any commercial bank operation cares to get into student loans...unless you capped it at $25,000 max.
Ah “the experts” strike again
Like the “experts” who started this whole system of graft for universities which allowed them to raise tuition to ridiculous levels for “degrees” that were worthless, and then a scheme that would “forgive” the debt because there was no way theu could be paid back by working at a coffee shop.
Meanwhile the universities got richer and richer
DEI, CRT, anything ending in studies….. what a scam of the taxpayers, and idiot students and their parents.
I have three kids, two became lineman, and one after serving in the military got a degree. He got a job at the power company that required a degree for no reason. He has since left, we starts a vacation rental business and he is a realtor, and doing great as are my other two boys. 6 figure incomes and no debt, but they work their asses off.
BTW, since he left the job no longer requires a degree. His degree was in business management and the job involved controlling power supply across the company. His intelligence, not a piece of paper made him good at his job.
Those who can will do, those who can’t teach😎
“How about this, get the Federal government out of the college student loan business and sell the current loans to a private bank or investment company.”
Maybe later - right now there’s $1.7 trillion of unpaid student loans out there...
Seems simple enough, doesn’t it?
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