Christopher Shays: “We have a certain part we call the direct student loan, which is in essence run by the government. The government was…”

“We have a certain part we call the direct student loan, which is in essence run by the government. The government was saying that this program was cheaper than to have the banks do it. But what they forgot to do was to compute in the cost of the government administering the program. So it did look cheaper until the GAO and the Inspector General said, wait a second, you better take a look at this, because this program is going to cost you more. Also I need to say that when you had the institutions deciding who would get the loans, particularly with the proprietary schools, they were giving out loans under the direct student loan, actually giving out the government loans to students who would participate but some of them not pay it back because frankly in some of the proprietary school programs they were in, they were not going to have employment when they were done. This is just to establish the fact that under the student loan program, which some of my constituents thought was being cut, it went from $24 billion to $36 billion and we saved the taxpayers $4 billion, and the banks would have had to pay more. It is funny that sometimes the Republicans are associated with wanting to protect the industry, the banks, and the banks were the ones that were going to have to step up to the plate and make up that difference.”