CNN) – President Barack Obama says the federal government is wasting money by paying banks to offer student loans, and wants to cut out what he calls "middlemen" who cost taxpayers billions, and to use the savings to expand other financial aid programs.
"It turns out that right now a lot of the student loan programs are still run through financial institutions and banks. So you got this middleman, and they get billions of dollars per year managing loans that are guaranteed by the federal government," Obama said at a New Hampshire event Tuesday. Obama said those middlemen "are essentially taking no risks, and yet they're still extracting these huge profits."
Read the facts and the bottom line after the jump:
CNN Fact Check: Would cutting student loan subsidies save taxpayers billions?
– The Obama administration says it can provide student loans far cheaper by eliminating the loan