President Bush Budget request

Just summing up the Student Lending requests from President Bush's budget request:

Oh dear. Lame duck president. Two years left. Needs money and support from congress for war in Iraq. Only thing left to do is throw the student loan program under the bus.

You can read about the illogical decisions yourself. But here's the effect for the borrower: origination fees will return to FFELP, any money saving benefits that lenders institute will dissapear, choices will be eliminated, competition will be reduced.

Bottom line is that the government isn't the best choice to fulfill a financial intermediation role. That's what banks do. They do it very well. They need to be compensated for this function and the risks they take, but they will do it better than the government could ever do it. Don't believe me? Ask the thousands of Katrina victoms that are waiting for FEMA money so they can get on with their lives.