5 ms·
> Otherwise there is no incentive for banks ... to not charge infinity for college. The vast majority of student loans are not made by banks, so I'm not sure w
by vonmoltke 7y ago
> Otherwise there is no incentive for banks ... to not charge infinity for college.
The vast majority of student loans are not made by banks, so I'm not sure what they have to do with this.
- breck 7y agoA business that loans money to people and charges them interest is a bank.
- vonmoltke 7y agoSo the Department of Education is a bank?
- dragonwriter 7y agoThe Department of Education isn't a business.
- vonmoltke 7y agoThen, again, what do banks have to do with this if a business that loans money is a bank, but the Department of Education is not a business and so not a bank?
- breck 7y agoI personally never dealt with the DOE, though I dealt with lots of private companies that actually did the lending and managing of the loans, even if the DOE was ultimately behind them.
- vonmoltke 7y agoPrivate companies do not do the lending, the DOE does. Stafford loans, both subsidized and unsubsidized, are issued directly by the DOE to the university. There is no middleman. What private companies are you talking about? Edit: I see what you are talking about. You are referring to loans issued under the discontinued Federal Family Education Loan Program[1]. That program ended in 2010 and, I believe, remaining loans issued under that program represent a relatively small portion of the DOE's $1.4T holding. The vast majority of what the DOE currently holds are loans directly issued by the DOE, and any talk of current education expense inflation cannot be separated from that. There are no banks to blame this on anymore. [1] https://en.wikipedia.org/wiki/Federal_Family_Education_Loan_Program https://en.wikipedia.org/wiki/Federal_Family_Education_Loan_...
- breck 7y ago> Private companies do not do the lending, the DOE does. Stafford loans, both subsidized and unsubsidized, are issued directly by the DOE to the university. There is no middleman. What private companies are you talking about? Thanks for the info. I'd have to go back through my old papers and find who I was paying, but IIRC the domains were all ".coms" and not ".edu". Basically what I'm saying is there is a huge private business in servicing these loans, even if it's the U.S. Taxpayer that is on the hook for the principal.
- vonmoltke 7y agoSallie Mae/Navient is the servicer for the DOE, but they don't issue anything. See my edit. I think you are drawing on experiences with a system that hasn't existed for nine years, at least as far as newly-issued loans are concerned.
- breck 7y agoGotcha, thanks. Yes my experience may be out of date.