I don't know if this is really going to go through--certainly the banks are going to fight against it with everything they've got--but Obama's budget calls for phasing out all subsidies to student lenders in favor of the direct loan program, and using the subsidies to fully fund the Pell Grant program and turn it into an entitlement.
Obviously, I have been calling for this for years. I'm sorry it took a global economic crisis and credit crunch to get us here, but publicly supported student lending is definitely the better way to go.
However, these days I'm more concerned about the multiple underlying factors that keep driving the cost of college upward, and increasing federal aid is actually not helping in the long run. For example, last night I visited the University of Tennessee at Knoxville (Go Vols!)
According to what the very intelligent and engaged members of the student Issues Committee told me, The school is going through simultaneous budget cuts and a 9% tuition increase. The budget cuts are so severe that 5 to 7 percent of students won't be able to get into the classes they need to graduate , which may force them to add another semester or even another year, which raises their burden even more! Simultaneously, a giant stadium renovation is going on, to the tune of $200 million. The students are steamed! But apparently the concerns of families and students are not being consulted here.