Think of it as a jobs program for "unnecessary middlemen."

Health care is the same way.

If conservatives said private care only, I could understand, but they say that universal health care means subsidizing emergency rooms for those who have no health insurance.

Emergency room care if very inefficient and expensive, but THAT's their plan.

Shall we discuss military contractors next?

idlemind, I think you mean "Think of it as a work program for 'unnecessary middlemen'". The government doesn't create jobs, remember?

It's not just a subsidy to loan-origination companies, but it's also necessarily a source of corruption for universities. The business is dead-simple, so really the only point on which the companies can compete is the amount of their subsidy they kick back either to the university or to susceptible officials.

What would be really nice: taking that $4 billion and turning it over to educational institutions to avoid tuition increases and cuts in faculty and staff.

Well, yeah. And that's why it's silly to hold up Republican failure as a failure of small government per se. Republicans love them some big government, as long as it's the handmaiden of certain industries: defense, pharma, agriculture, and finance.

Big government to try to help people? Not so much.

First off, cutting out the middlemen should mean "ALL" the middlemen---and that includes the college loan officers who are susceptible to being bribed. Market the Direct Loans Program directly to parents and potential students by showing them how a Direct Loan is less expensive than a Guaranteed Loan.

Raise your hand if you think that any college student---their battle-cry being "free food!"---or their parents, for that matter, would want to pay MORE for the same thing....

Then, just simply tell every college and university that accepts fed-funded loans: "Every student has a legal right to choose a Direct Loan over a Guaranteed Loan. The moment you deny so much as one student that right, your entire fed-fund availability dries up---and your institution dies overnight."

Can you say "Buh-bye, loan sharks?"

You need to restore Yglesias's original strikethrough formatting or take that part out. Just posting it all as clear text leaves you with a broken sentence.

THey also want to hold onto the nifty business they have a jacking up student borrower's rates when they miss a payment.

The whole thing is a horror show. It's long since past when the gov should cut out the banks.

This is one of those strange stories in which Democrats want to spend less money and make a federal system more efficient, and conservatives are livid.

Not at all strange. Repugs don't care how much money gets spent or how inefficiently, as long as the recipients are obscenely rich parasites and corporations.

Trillions flushed down corporate shit-holes (see: Halliburton and ADM) are perfectly fine with them.

More than ten bucks a week in food stamps to a single mother so her children don't starve, however, is outrageous waste and fraud.

They hate this proposed change because it takes profits away from usurious banks and finance companies and makes college more affordable for non-rich people.

Everything ludicrous about repug "policy" makes perfect sense if you just remember their goal is to help rich people and corporations. Period.

That crock of shit story on NPR this morning about hte f-22 dovetails with this. It's almost identical. Saxy Chambliss and 44 senators want to keep spending 65 billion on a weapon that is useless because it employs up to 90,000 people. Same exact thing.

As long as the money goes to their buddies then they have no fucking problem with government spending. Make no mistake this doesn't come down to conservative principles on economics or any such thing, it comes down to their gravy train of kickbacks getting taken away from them. That should be the story played loud long and clear.

"Republican lawmakers love cutting spending, improving efficiency, and streamlining government programs. Except when they don't."

Those exceptions being when they, personally, or their friends, personally, make a profit.

Steve Benen wrote: "Republican lawmakers love cutting spending, improving efficiency, and streamlining government programs. Except when they don't."

Republicans love using the power of government for corrupt purposes of private financial gain for themselves and their ultra-rich corporate white-collar-crook cronies and financial backers at the expense of the American people.

And once again, conservatives are livid. Rep. Howard P. "Buck" McKeon (R-Calif.) railed against a "government takeover of the private-sector-based student loan program."

Aside from Yglesias's point, its also worth noting that the "private-sector-based student loan program" has almost completely imploded as part of the general credit market collapse, even with the federal guarantees; lenders fled the market last year, reducing the amount of loans they were making and giving up on them altogether,

The only way we are going to have a healthy student loan system while we are waiting for the private banking system to recover is if the government steps in and does it itself.

This country is full of unnecessary middlemen. Take Ticketmaster, for example. Part of the problem with our economy is that we have entire businesses that do nothing but step in and take a cut... It seems to me that Republicans think it's ok to have inefficiency and overpaid employees as long as they are in the private sector.

Since John McCain's been getting so much airtime anyway, it would be nice if he were quizzed on this particular issue.

Back in the early eighties - last time economy went in the toilet - I got a job with a collection agency working on old student loans as a subcontractor for the feds. Now I'm sure some of the debtors were fibbing - imagine that!! - but a very common tale was that when they graduated and contacted the lending institution about payback they were told the loan had been referred back to the guarantor (?) and they'd need to contact them. The banks collected their fee up front, then as soon as they could dumped all the back-end work on the feds for followup and collection. I imagine it's what goes on now, too.

Uhh, the GSL vs. NDSL loan was around, IIRC, all the way back in the 1980s, Steve. Clinton did not "invent" anything here.

Agree with Tim, that alot of middleman are wasteful. Imagine if we cut out middleman in food and clothing. Think of all the marketing money that could be saved if we all just bought from government stores that did not advertise specific brands. The poor could be fed and clothed.

It wasn't only bribes that made the FFELP attractive to colleges. Before they were borrowing money from the Department of Education, they were allowed to offer incentives on loans so that they could compete better. These made the terms more attractive than those offered by the Direct Loan program. Now these incentives are gone.

Direct federal student loan

Conservatives know the free market WASN'T producing student loans.

Conservatives supposedly want kids to be educated.

Conservatives supposedly want government to avoid waste fraud and abuse.

Obama says government is necessary to educate kids and we can do it without so much waste fraud and abuse.

But, Conservatives dislike Democrats even more than principles.

Maybe government should set this up so there are two ways: free market with NO government guarantee or government loan. Which do you think would win?

Conservatives can't really handle free free free markets, only the ones where they can socialize losses and privatize profits.