Last year, the federal government eliminated the guaranteed student loan program that has been in effect since 1965, replacing it with a direct loan program. (The change was part of the giant health care act, “Health Care and Education Reconciliation Act of 2010.”) Beginning in 2011, all new federal student loans flow directly from the U.S. Department of Education to universities and students via the direct loan program. Sallie Mae, for years a lender of subsidized loans, is no longer a part of the loop.
But the new Congress may return to guaranteed loans—an arguably more competitive system. The higher education subcommittee in the House is likely to hold hearings on student loan programs, partly to evaluate the change and perhaps consider restoring the guaranteed-loan system.
Compare the two programs and tell us what you think (in our comments section)! Perhaps we should have no program at all.
(Keep scrolling down)
