...Obama. Another fight with the financial industry. This time, it's with the private student loan industry, a body of companies and quasi-governmental agencies that have been providing a strong alternative to the Federal Direct Student Loan Program (FDSLP), where the government is the direct lender. And this fight could be nasty, because it involves jobs at big firms in Congressional districts.
In 2007 the private student loan industry was thriving and profitable. The Federal government subsidizes the loan companies, making guarantees up to 97% of the loan volume and ensuring interest rates. But like many programs, problems eventually crept in, this time with the schools' financial aid offices making deals with the private lenders. They lost sight of the customer - students were not getting the best deals possible. The schools and the loan companies were benefiting and the students were forgotten.
[personal rant: private industry and the free markets work BEST right up to the point when people forget that they serve customers, not their own self interests. -sigh- ]
But there is a whole lot pf politics involved with this battle. Obama and the Democrats want government to run seemingly everything these days, and the student lending industry is no exception. The Republicans will fight him on principle, but it is the Congressional Democrats that may give Obama the biggest fits. They need to look out for their constituencies.
If you are not sick of the political battle between our federal government and private industry, and you can take the increase in your blood pressure from the mess we're in, read, "Plan to Change Student Lending Sets Up a Fight" from the NY Times.