Congress.org - News : Who should make student loans?

Who should make student loans?

Should the federal government stop subsidizing private student loans?

The House of Representatives is debating overhauling the nation's student loans, including ending a program where private lenders make loans backed by the government.

Instead, the money would go directly from the government to students.

The Congressional Budget Office estimated the change would save about $87 billion(top of page 5) over the next decade, though that figure could be much lower due to administrative costs.

It would also fulfill a campaign promise from President Obama (No. 259 on PolitiFact's handy list).

The banking industry fought back with this Web site,arguing that the shift to direct lending would cost jobs and hurt competition.

Longtime political writer Michael Kinsley made the case for direct lending in a 2007 article . The Associated Press also had a good roundupon the issue this morning.

-- Ryan Teague Beckwith, Congress.org

Update: The House passedthe measure 253-171 this afternoon. It now heads to the Senate.

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