The Educated Guess � Obama: Cut banks out of college loans

The Educated Guess � Obama: Cut banks out of college loans

Toddlers of America are counting on U.S. senators to take a cue from the president – and the rest of pissed-off America — and stick it to bankers.  They’re hoping that Congress restructures the federal college student loan program.
Here’s why: President Obama has asked Congress to end the Federal Family Education Loan program, in which the government has subsidized banks’ loans to college students. Instead, Obama wants the U.S. Treasury  to issue the loans directly.
The federal government has been underwriting loans for 45 years in order to encourage banks to make  loans they’d consider risky. But the non-partisan Congressional Budget Office estimates the federal government could save $87 billion over a decade if it took over the program. Other experts say that’s too high while acknowledging there would be some savings.
Last September, the  House pass the Student Aid and Fiscal Responsibility Act along party lines. But, not surprisingly, banks and the student loan industry have lobbied mightily against the change,  and the bill has been stalled in the Senate.