Bill's Death to Private Student Loans Will Result in Job Losses

The final vote-getting link in the sausage-making of the health care bill was its $61 billion in health care "savings" which shifted all lending from the lender-based Federal Family Education Loan Program to the government's Direct Loan Program. The language made it into the bill despite private lender's best efforts to stop them from ending their ability to make loans, which they argued would kill thousands of jobs. The federal student-loan takeover of the remaining 14% of private industry loans is both another reason to hate this bill and an example of our government's overstep to the detriment of competition and private industry. To be fair, the abolishment of the private student loan industry started with the creation of the “Stafford Loan” program in 1965 to allow students to borrow money cheaply with a government guarantee. Subsequently, the government saw fit to transfer loans made by private lenders to the government’s books with a subsidy, which allowed sketchy, but more favorable book-keeping. Clinton then started the direct loan program where the government would directly make its own loans to students, supposedly increasing competition. With a glance back at history, it's easy to see how lenders were slowly elbowed out by government loan programs in this industry. As I said, only 14% remain and with this bill, Obama and Congress will have eliminated the last profit-makers from the business to "save" money - money which he has already spent on health care at the expense of many thousand jobs, according to private banking institutions. (See http://www.journalstar.com/business/local/article_e1492e4a-391f-11df-a246-001cc4c03286.html)