Trump privatizing student loan system would spur higher-ed reform, lower costs: expert

Since its establishment in 1979, the U.S. Department of Education (DOE) has shaped federal student loan policies, which have, in turn, influenced the rising cost of an education and the loans to pay for it. As President Donald Trump moves to significantly downsize, and eventually shutter, the DOE, one expert says a completely private loan system would work better than shifting administration to other government agencies.

"The Clinton administration introduced the direct loan program, so this was kind of the competitor to the quasi public-private system, where now the government was going to be the one issuing the loans, and both systems kind of coexisted for a couple years, until 2010, when we got Obamacare, and that basically used some of the paper profits from switching all the loans to government loans to help pay for Obamacare," Cato Institute expert Andrew Gillen t...