The US Treasury has committed up to $60 billion to a scheme cooked up by Citigroup and Morgan Stanley to funnel more money to student lenders, who have seen a credit crunch situation and drying up of the secondary market similar to other purveyors of consumer credit.
This is outside the auspices of the $700 billion bailout.
I've said it before and I'll say it again: the government should stop subsidizing the middleman! Instead, this is an excellent opportunity to shift to the direct loan program,where students get their funds directly from the Treasury without Citigroup or anyone else taking a cut in between. Colleges across the country are already voting with their feet for the simpler, cheaper, all-government program.