WASHINGTON, April 13 (UPI) -- Private U.S. lenders are rallying to save the subsidized student loan program that U.S. President Barack Obama has threatened to end.
Obama has proposed redirecting the billions of dollars in bank profits to scholarships for poor students, The Washington Post reported Monday.
The Federal Family Education Loan Program, advocating for a change, said private lenders for years have collected huge fees for loans that are 97 percent government-guaranteed.
With subsidies and guaranteed loans, the role of private lenders is moot, some argue.
In opposition to a change, Kevin Bruns, executive director of American's Student Loan Providers said the administration "decided that it wants to capture the profits of federal student loans."
Martha Holler, spokeswoman for Student Loan Marketing Association, said the major lender would agree to "constructive alternatives that would generate a similar level of taxpayer savings."
But, Sallie Mae is looking for few changes, the newspaper said.
Sallie Mae Chief Executive Officer Albert Lord said the industry can "meet or beat the budget savings that are in the president's budget with the exact same system that we have got working now with maybe a few tweaks."
