Chuck Grassley: “In fiscal year 2014, the U.S. Department of Education will make about $112 billion in Federal direct loans to students.…”

“In fiscal year 2014, the U.S. Department of Education will make about $112 billion in Federal direct loans to students. The Federal Government already holds more than $1 trillion in student loan debt. So that makes the U.S. Department of Education one of the country's largest lenders. Total student loan debt in the United States is now second only to mortgage debt, and about 90 percent of all student loans happen to be issued by the Federal Government. When elected officials say we have a student loan crisis because too many students owe more than they can afford to repay, we have to keep in mind who it was and is that made those loans to students in the first place. It was, in fact, Uncle Sam. What is one of the first things a Federal regulator looks at when a private bank issues a loan? They look at whether the bank has confirmed the ability of the borrower to repay. Federal student loans are given out without a credit check or any analysis of the student's ability to repay the loans in the first place. The fastest growing category of student loans is Federal unsubsidized student loans, which are given out regardless of need. That means that students across this country get an award letter from their college saying they are eligible for thousands of dollars in Federal loans, even though in many cases they may not need all of those loans to cover their tuition and other costs.…”