Loan Program Comparison
• President Bush’s recent budget reveals that the bank (FFEL) program costs taxpayers billions of dollars more each year to run than does the DL program.
• From 1992 to 2004, the cumulative taxpayer subsidy costs were $39 billion for FFEL loans, and only $3 billion for Direct Loans.
• For a typical college student’s debt of $20,000, the federal government spends nearly $2,200 more in subsidy costs for a loan through the FFEL program.
• Private lenders like Sallie Mae, fearing cuts to government subsidies, oppose the legislation.
• Private lenders have used guaranteed student loans to create enormous profits for their shareholders while the federal government assumes all of the risk of the loans.
• From 1992 to 2004, the cumulative taxpayer subsidy costs were $39 billion for FFEL loans, and only $3 billion for Direct Loans.
• For a typical college student’s debt of $20,000, the federal government spends nearly $2,200 more in subsidy costs for a loan through the FFEL program.
• Private lenders like Sallie Mae, fearing cuts to government subsidies, oppose the legislation.
• Private lenders have used guaranteed student loans to create enormous profits for their shareholders while the federal government assumes all of the risk of the loans.
