The President's plan is beginning to gain public support, and the chairman of the Education Committee has backed the proposal. However, there is significant opposition from private sector officials, many of whom claim that the transfer will cause absolute turmoil for colleges and students.
According to President Obama, the current system takes advantage of students' financial need rather than trying to alleviate the burden of college loans. His plan would not only help support Pell grants for low-income students, but it would also decrease federal debt by $87 billion over the next 10 years.
The current system makes it easy for private lenders to profit as they take taxpayers' money to create loans and then sell them back to the treasury. As private lenders profit, students bear the brunt of the system by paying more for their loans.
Many Republicans have opposed the effort set forth by Obama, claiming that it is just a scheme for Democrats to increase the size of the government. If the plan were to be implemented, private lending jobs would certainly be cut. Thus the dilemma becomes: Should we decrease the cost of college loans if this means cutting jobs in the private sector?
Articles referenced:
Evan Kendall
INeedAPencil Summer Associate
Sharon High School 2010 (Sharon, MA)
