<p>“I think the bigger issue is not what interest is charged, but just the fact that we’ve come to the point where college is unaffordable to many, and a whole generation is taking on the type of debt for college that, at least in my generation, was reserved for home-buying. At any level, the long-term interest payment do function as a type of tax on the privilege of having attended college (whether or not one earned a degree) – and I do think there are some very serious and significant social policy ramifications to that”</p>
<p>Very well stated Calmom.</p>
<p>I recall the government stating that the reason to change the laws regarding college loans was to get the “middle man” (private banks) out of the business of making a profit on middle-class kids going to college. Now, all of those college loans go through the Department of Education (which is acting as a federal bank, of sorts). But the so called “profits” are being generated, just not by shareholders of banks. That is a lot more money than is required to administer the program. It is being used for other education related priorities, not for the college education of the middle-class kid taking out the loan.</p>