> (a) Student loans in the US are mostly not from the government in the first place, they are from private investors or banks that the schools have made deals with. The USG role is guaranteeing them.
Your information is several years out of date. Prior to July 2010, the bulk of student loans were made through the Federal Family Education Loan Program (FFELP) which were as you describe. But that program was eliminated in the Health Care and Education Reconciliation Act of 2010. Since then all Stafford, Perkins, and PLUS loans (i.e. the lion's share of all student loans) are made directly by the federal government.
Only non-program student loans are no made by private banks, and they are not government guaranteed -- though they are still non-dischargeable in bankruptcy. Such loans only accounted for only around 5% of the total borrowed last year.
In addition, many of the loans issued privately prior to July 2010 made their way into the government's hands during the financial crisis, so that of all outstanding student loan debt around 85% of it is currently held by the government.
Your information is several years out of date. Prior to July 2010, the bulk of student loans were made through the Federal Family Education Loan Program (FFELP) which were as you describe. But that program was eliminated in the Health Care and Education Reconciliation Act of 2010. Since then all Stafford, Perkins, and PLUS loans (i.e. the lion's share of all student loans) are made directly by the federal government.
Only non-program student loans are no made by private banks, and they are not government guaranteed -- though they are still non-dischargeable in bankruptcy. Such loans only accounted for only around 5% of the total borrowed last year.
In addition, many of the loans issued privately prior to July 2010 made their way into the government's hands during the financial crisis, so that of all outstanding student loan debt around 85% of it is currently held by the government.
Refs: http://www.asa.org/policy/resources/stats/ http://febp.newamerica.net/background-analysis/federal-stude... http://files.consumerfinance.gov/f/201207_cfpb_Reports_Priva...