The investigation of New York State's attorney general, Andrew M. Cuomo, into the questionable practices of lenders in federal student-loan programs has helped raise public awareness of one of the greatest scams in our government: The Federal Family Education Loan program, otherwise known as the guaranteed-student-loan program, is unnecessarily expensive, structurally broken, and rife with corruption. It is increasingly clear that our convoluted federal student-loan delivery system, through which private lenders provide government-backed loans to students, cannot be fixed by incremental reform. It deserves a swift and timely death.

The recent series of scandals involving student financial-aid administrators and a Department of Education official's acquiring and holding stock from a student lender is merely the latest in a string of problems that have plagued federal student-loan delivery for years. On April 4, the New America Foundation's Higher Ed Watch first reported that it had found that several financial-aid administrators had "significant personal investments in a publicly traded, for-profit student loan company," Student Loan Xpress. It also discovered a potential similar conflict of interest with an official who oversaw lenders participating in the guaranteed-loan program at the Department of Education...

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