According to yesterday's Wall Street Journal, President Obama plans to have the U.S. Department of Education move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans. Starting next summer, the taxpayers will be spending roughly $100 billion per year in student loans.
The article points out:
"The system broke down after Congress in 2007 legislated a return so low that no private lenders could make money holding these assets. To keep the money flowing to student borrowers, the government began buying the loans from private originators last year. But this larger federal role was intended to be temporary, with an expiration date next summer. The news from Washington now is that rather than scaling back federal involvement, the pols want the U.S. Department of Education to be the exclusive banker to America's college students."
The system broke down after Congress 'made it better.' The idea was for the government to temporarily solve the problem and then have the private sector take over. Obviously that didn't work. As the healthcare debate continues, we need to look at how well Congress has managed our taxpayer funds in other areas. This is a prime example of why I want the government to keep away from my healthcare! Anytime the government gets involved in a program, they take it over and it costs the taxpayers a whole lot more money than what was promised.
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