There was a big scandal a few years ago when it was revealed that the banks were making big kickbacks to university individuals who were channeling students to take the private school loans from their institutions. Heads rolled.

For a number of years, ever since the "reform" of the bankruptcy laws, every kind of expense can be adjudicated by a bankruptcy judge EXCEPT school loans. The banks know a cash cow when they see one and they put a lot of pressure on legislators to remove school loans from the whole bankruptcy discussion.

My daughter is in college, and the loans available are all through private for-profit banks. She gets Pell Grants, but they only help a little. The banks are all suggesting that parents go deep into debt to take out these "low interest" (ha!) loans to help their children--but guess what? If the parent declares bankruptcy, it is STILL a student loan and there is no mediation of that debt. We didn't bite, and though she has had to take a few loans, I think it is still under $10,000.

The White House is taking the lucrative subsidies and profits away from greedy private banks and that is what needs to be done. Just like earning profits on Health Care is an immoral form of profit for insurance companies, so is the profit these banks get in leveraging the future payments from today's college students.

There is a great deal of expansion room in the universities that are in my area. They can accommodate higher enrollment, and while many schools are building new up-to-date buildings to accommodate modern programs, this is for advanced research, it isn't always or even usually necessary for the undergrads entering the university today. Stifling the commercial banks in no way stifles the universities they hover around.

SRS