Trump administration considers sale of federal student loan debt

[eppur_se_muova]

3. The DoE purchased much of that debt ***FROM*** private guarantors/lenders. I know, they bought mine.

The Guaranteed Student Loan Progarm was *ostensibly* created to help people afford a college education. But of course the 'advisors' who helped write the legislation all came from the financial industry, and knew they would be going back there to seek later employment, so they engineered the whole program to be a big Welfare operation for the lenders -- a guaranteed income stream for banks, but guaranteed debt for borrowers, who can never escape, not even by bankruptucy.

Publicly, it was presented as a case of the lenders taking on some risk they would not have taken on without gov't assistance and guarantees, benefiting the borrowers and making the program 'safe' with no cost to taxpayers. In reality, there was never any real risk for lenders -- unpaid loans got sold over and over between different collection agencies, and eventually, the DoE became the purchaser of last resort -- so taxpayers got the bill anyway, and lenders collected more in fees than the loan program ever cost them.

So ... now they want to sell uncollected debt back to the companies who were happy to dump it on the DoE ?? Lots of luck with that. Any remaining uncollected debt will probably remain unpaid until the borrowers are dead -- and nothing left of their bankrupt estate to collect.