Student Aid: Will many low-income students be left out? (available for purchase from CQ Researcher online)

...The idea that having more lenders in the program improves customer service through competition doesn't make sense, says Jason Delisle, research director for education policy at the New America Foundation. The Loans are an identical commodity offered under government rules, so lenders have little room to customize loans or services, he says. In addition, lenders generally hold the loans on their own book for only a few months before selling them. ...

... The large number of lenders competing for student-loan business is evidence that private lenders have long received "excess subsidies," according to Michael Dannenberg, director of education policy at the New America Foundation. "There are reasons Sallie Mae's [Student Loan Marketing Association's] stock has increased by 2,000 percent in teh last decade, and those reasons are a government garantee against risk and very large government subsidies." ...