Friday, November 14, 2008

Government Bailing Out Private Student Lenders?

As part of Paulson's leave-no-bank-behind rapidly morphing bailout package, the Department of Ed is now extending "relief" to private lenders like Sallie Mae.
"Federal officials say that as much as $60 billion in student loans may be eligible for purchase under the new expansion."

A cheaper and more precisely targeted way of making student loan funds available would be to raise loan amounts on federal direct loans. Instead of providing more corporate subsidies, the government could lend more money to students directly at lower cost.

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