Government Bungling of Student Loans

The Obama Administration is telling us how ObamaCare can please the health consumer while cutting health insurance costs.

Here is the perfect example why this can never work as advertised.

The government has taken over the student loan business. And it is costly. Private lenders are being forced out of business. And what’s more, students are not happy with the government efforts.

After July1, 2010, private lenders no longer were able to make government guaranteed student loans. The government now had 20% of the market and is ready for a complete takeover.

Taxpayers will put up $100 Billion as a start.

The problem here is that private lenders did a better job of evaluating risk and collecting bad debt than the government. Any estimates of “savings” by the government is a fantasy. Government figures, for example, never have those the private lenders include, such as two-year college programs with much higher default rates. What is more, the government has a poor service record among student borrowers.

A portent of what can happen to our health system.