Dramatic Shift Away From Federal Student Loan Origination Under Trump?

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Dramatic Shift Away From Federal Student Loan Origination Under Trump?

Dec, 2nd 2016

Donald Trump may bring back bank and non-bank private lenders to student loan origination if the Department of Education (ED) reduces federal loans available for college. Fewer federal loans would likely drive borrowers to more expensive private loans.

The Republican party's platform states, "The federal government should not be in the business of originating student loans." It adds, "In order to bring down the costs and give students access to a multitude of financing options, private sector participation in student financing should be restored."

Higher ed experts seriously doubt that private loans would ever be cheaper than federal loans, where interest rates are lower across the board. "Republicans have signaled an interest in bringing back banks as middlemen in the school loan program, which would be a costly giveaway that does little to increase access to higher education and affordability," said Mark Huelsman, senior policy advisor at Demos, a New York City-based think tank.


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