Left I on the News

Aside from the fact that student loans per se shouldn't even be necessary (all education should be free, not just education through high school), in a world where student loans do exist, we find, to no one's surprise, that it suffers the same fate as medical care - capitalism giving us just as much bureaucracy, but at higher costs thanks to the "need" for profit:

In a fierce contest to control the student loan market, the nation’s banks and lenders have for years waged a successful campaign to limit a federal program that was intended to make borrowing less costly by having the government provide loans directly to students.

And how much profit are we talking about? Well, this should give some idea:

The companies have offered money to universities to pull out of the federal direct loan program.

Here's Capitalism 101 - companies don't offer money for something unless there is a return on investment. Here's another indication of the money involved:

President Bush’s budget reports that in 2006 for every $100 lent by private lenders, the cost to the government of subsidies, defaults and other items was $13.81, while the same amount lent through the direct loan program cost the government $3.85.

$10/$100 savings if the money is lent directly by the government - a whopping 10%. 10% of what? $69 billion.