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You and I are the bank, these loans are federal, no private bank is giving these loans out, you and I are and we are footing the bill when the natural default o

• logfromblammo 9y ago
  Private banks are giving the loans out. When they do, they keep the interest, but shovel the default risk onto the treasury without paying them to do it. The Dep't of Education also gives out direct federal loans and grants, and sometimes those private banks service those loans, but federal financing is now not quite enough to pay for a whole degree, so private loans are filling the gap, at greater expense to the students.
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