Submitted by Jon (not verified) on July 17, 2009 - 12:48pm.
A _retroactive_ change in student loan bank subsidies?!? Hmm. Secretary Spellings told us that the government couldn't retroactively change student loan bank subsidy levels when it came to the 9.5% loan scandal. The government was contractually bound. The lenders would sue. The taxpayers had no choice. Now of course there's no problem in changing the terms of a contract to give lenders a little extra.
More important, whether it scores or not, this change is another example, like the initial shift in the lender subsidy base to commercial paper, of heightening lender profits on guaranteed student loans and shifting the hedging of risk from banks to taxpayers.
Heads, the banks win. Tails, the banks win.
A _retroactive_ change in student loan bank subsidies?!? Hmm. Secretary Spellings told us that the government couldn't retroactively change student loan bank subsidy levels when it came to the 9.5% loan scandal. The government was contractually bound. The lenders would sue. The taxpayers had no choice. Now of course there's no problem in changing the terms of a contract to give lenders a little extra.
More important, whether it scores or not, this change is another example, like the initial shift in the lender subsidy base to commercial paper, of heightening lender profits on guaranteed student loans and shifting the hedging of risk from banks to taxpayers.
Heads, the banks win. Tails, the banks win.