For those that think the government is taking over student loans you're idiots. Student Loans are regulated by the Department of Education. You already have to be approved through a government process to determine need.
Student Loans are private capital provided primarily by banks. The money is then guaranteed by States first and then the US government. The qualifications are determined by the federal department of education and those qualifications don't change drastically from year to year. It's a fairly simple formula. The cost of the education minus the parental contribution based on taxes and whatever is left over you are eligible to borrow up to limits determined by your grade level.
SallieMae, the only private servicing agency large enough to mean anything is mostly concerned with loosing the originations and servicing monies generated by student loans. The biggest being interest subsidies on subsidized student loans. Direct Lending is the government branch that currently services about 50% of all student loans. Sallie Mae makes up the remaining 49% and the remainder are serviced by small state agencies and a handful of very small servicing companies.
SallieMae has been campaigning against this so heavily since it will cause their business to fail, not due to a government take over, but by the lost subsidies which will allow the loses of their private student loan portfolio to finally tighten the noose on them and choke them to death. SallieMae made a huge investment in private students loans, self insured them, and are now scrambling to hide the sky rocketing loses. Check out the reason that their various attempts at merging with banks have fallen through.
