To the editor:

We’ve been hearing about how our tax dollars need to be used to provide liquidity to banks so they can make loans to us for various reasons, including student loans. OK, so let’s think about it. The private-lender-based federal student loan program is guaranteed by the taxpayer with various subsidies being paid to these lending entities to ensure their ability to make student loans. These entities get a little piece of the action in the form of various fees and lots of the action in the form of interest.

Recently the feds enacted legislation to help keep these private loans in business by funneling federal dollars to their coffers, since many of these lenders were dropping out of the business claiming inability to make new loans as the massive profits were reduced. Now, as part of the “rescue” plan to ensure liquidity, we are going to buy some of these banks or pump even more money into their coffers so the private lenders can continue to make loans to students and continue to reap the benefits of these fees and interest.

This doesn’t make much sense when we have a direct student loan program in place where the federal taxpayer provides the funds to the Department of Education to loan directly to the students and the taxpayers reap all the fee and interest benefits. We should just have one federally insured student loan program and it should be the direct loan program.

Chris Johnson,
Lawrence