The focus on private student loan lenders seems odd considering that $1 trillion out of the $1.2 trillion of outstanding student debt is public. I think a lot of private student loan providers are great. For instance, SoFi often offers rates lower than that of Sallie Mae, but discriminates on the school and the major, which seems reasonable. There are other benefits such as the ability of former students to be able to default on their private debt.<p>[0] <a href="http://www.consumerfinance.gov/newsroom/student-debt-swells-federal-loans-now-top-a-trillion/" rel="nofollow">http://www.consumerfinance.gov/newsroom/student-debt-swells-...</a>
Completely agree that this is the solution, although I would probably go even further and kill college loans for good.<p>I "get it" that this was done with the best of intentions - to help more students get into college. However, these sort of "guaranteed money from the government" solutions <i>always</i> end up distorting the market, and it's for the worse for the students.<p>Whatever alternative solution exists it shouldn't allow for "virtually unlimited" sums of money to be requested to help students go to college. But even if you limit let's say to $10,000 the maximum amount for a student loan and let's say without any of that, the cost of college would be $100,000, the student still wouldn't have to pay "only $90,000" in the end. The private colleges would just end up raising the price to $90,000. And now you've just made it so the colleges get $10,000 free money from taxpayers. This always happens with subsidies and such.<p>What's worse, is that those who get the free money, "get used to it", or in other words, they become less efficient and more costly, so that when the government tries to <i>cancel that subsidy</i>, those who got it are outraged about it and say they would have to cut jobs and whatnot. I assume if the governments puts a limit on private loans too, the teach union will go immediately to the streets as well.