For too long, bankers have gotten a free ride from the U.S. Department of Education.
Under current law, taxpayers provide as much as $9 billion each year to subsidize guaranteed student loans issued by banks. The banks earn profits on the interest; if students default, taxpayers take the loss, not the banks. In other words, working Americans pay while bankers get rich.
Meanwhile, educators, engineers and computer scientists — the backbone of the new economy — face crushing debt from six-figure college tuitions. A study of national post-secondary student aid found that in 2008, two-thirds of college seniors graduated with debt averaging more than $23,000. That number will rise as public and private college tuition costs escalate.