Obama Backs Placing Student Loans Under Government Control

No sooner did the federal government rid itself of the extra baggage that is student loans when it spun off Sallie Mae in 2004, then along comes Barack Obama, suggesting that student loans need to be brought back under governmental control.

Obama’s comments could be seen as a response to recent conflict-of-interest scandals that have plagued the student loan industry in recent months.

"It is long past time to put an end to the rampant abuse by lenders of our student loan programs," Obama said in a statement. He would eliminate the Federal Family Education Loan program that provides subsidies to banks and mandate that all federal student loans be provided through the direct loan program.

Though not climbing all the way up the nationalizing mountain, Senator Hillary Clinton, also a candidate for the 2008 presidency, supports the direct loan incentives program as well.

Who doesn’t support these direct loan incentives?  The student loan industry.  They argue that the federally guaranteed loans they make are cost-efficient, promote competition in the industry and come with needed services for universities and the students who attend them.