<p>Sorry, but I must correct you once more. It’s not Sallie Mae and NelNet who are trying to squeeze out the nonprofits, it’s Kennedy and Pelosi. The idea is to get rid of all the nonfederal lenders and go to 100% direct student loans where the only lender is the federal government. That’s why the bailout didn’t include the nonprofits. They don’t care if the nonprofits w/draw or go under. The bailout is a temporary measure for SM and NN due to their volume, much in the way the Bear Stearns bailout was cause they were too big to be allowed to fail. Ted and Nancy won’t hesitate to get rid of SM and NN once they have their federal infrastructure up to snuff.</p>
<p>And 544 billion of debt ourstanding is not “residing in the coffers” of anyone on the lending side. The lenders raise that money by selling bonds to institutional investors and then lend it out to students who pay their college expenses with it. When the students pay off the loan, the proceeds go to pay off the bonds so the “personal investments” recover on their (ahem) investment. The only money the lenders keep is their fee, which Ted and Nancy have reduced to below the cost of running the business, so the lenders are pulling out. Which is what Ted and Nancy want.</p>