<p>There’s been some discussion about responsible lending practices and disclosures. As far as I know, there are no lenders for these subsidized stafford loans. Doesn’t the money come directly from the US government and isn’t eligibility based solely on need. As a result, I don’t think there is any traditional lending being conducted here.</p>
<p>I understand why parents and students want the rate as low as possible. The question I have has to do with the costs of the program. Does anyone know whether the current interest rate of 3.4 is enough to cover the cost of the defaults on the loans being made. In other words, I would think the interest rate should be set so that the government is not losing money on administering the program and on having to write off a percentage of the loans. Has anyone seen an analysis along these lines.</p>