Comments on: Education and the Silent Trillion http://badice.com/2009/09/14/education-and-the-silent-trillion/ badice.com ~ musings for the masses Tue, 07 Feb 2012 18:10:36 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jeff http://badice.com/2009/09/14/education-and-the-silent-trillion/#comment-71 Jeff Thu, 17 Sep 2009 19:14:04 +0000 http://badice.com/?p=2404#comment-71 Why no mention of the subsidy provided by the federal government for student loans? You state that the banks raise money in the private sector to lend to students, but student loans are heavily subsidized by the U.S. government (in addition to the guarantee for defaults). Basically, the government gives money to the banks to lend to students under a government guarantee on terms dictated by the government. What value are the banks providing by administering the program? If the federal government can save money by cutting out the middleman, why not? Also, why do you expect default rates to skyrocket? Why no mention of the subsidy provided by the federal government for student loans? You state that the banks raise money in the private sector to lend to students, but student loans are heavily subsidized by the U.S. government (in addition to the guarantee for defaults). Basically, the government gives money to the banks to lend to students under a government guarantee on terms dictated by the government. What value are the banks providing by administering the program? If the federal government can save money by cutting out the middleman, why not?

Also, why do you expect default rates to skyrocket?

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