Direct loans--student loans lent directly by the federal government--are more efficient and 12 times cheaper for taxpayers than the loans that Sallie Mae earns billions on. The banks' profits basically = federal subsidies. The government's own numbers, in a report released September 29, say so. And Congress is keeping that report secret until October 28--2 days after the HEA goes back to the House committee, quite possibly for more cuts to student loans. The whole story, plus an alert to write your Congressperson, is at Student Loan Watch.
Why wouldn't Congress want an estimated $17 to $60 billion in free money to apply toward more student aid? The same $reason$ Congress tends to pass laws that favor other highly profitable corporations. See this Chronicle of Higher Education investigation for details:
.... over the last year and a half, officials with the loan industry and proprietary institutions [for-profit colleges] have given, individually and through political-action committees, or PAC's, almost $1 million in campaign contributions to the 49 members of the House Committee on Education and the Workforce, according to Federal Election Commission records through the end of May. More than half of the money, about $540,000, has gone to the two Republican lawmakers in charge of drafting the higher-education legislation -- Reps. John A. Boehner of Ohio, who heads the full committee, and Howard P. (Buck) McKeon, who leads the panel's subcommittee on higher education.