One Stop Shop for Federal Loans in '10? | 04.20.09

Posted in FAFSA, Graduate Loans By Student Loan Network Staff

Monday Morning Rant…

President Obama’s recent plan to eliminate private lenders from the private student loan market would be damaging to students and take away a students right to choose.

At present there are two primary lending options for students; the government’s in-house program and private lenders such as Sallie Mae, Suntrust, Discover Student Loans, Wells Fargo, Bank of America, and Citigroup to name a few. Obama’s plan would move all federal loans such as the Grad Plus and Graduate and Undergrad Stafford loans over to the government’s in-house program leaving private lenders out in the cold.

The private sector has been supplying funding for students for years and now, by 2010, the government could pull the rug out from underneath them if Congress gives the O.K. This would have a crippling effect on the public sector costing thousands their job.

Having options is what makes this nation so great. If we didn’t have Burger King and Wendy’s than McDonald’s could charge $6 bucks for a cheeseburger with no competition. What kinds of fees will the government be attaching to these loans? What type of borrower benefits would exist? Private lenders help the student loan industry, not hurt it.

I don’t know about you, but I don’t want any one entity monopolizing the federal student loan industry. As a consumer I want options.

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