Should Non-Bank Lenders of Student Loans Get Bailout?

An editorial in The Modesto Bee argues against using the approved federal bailout money to help non-bank lenders of private student loans:

Paulson wants to use some of the $60 billion to bail out providers of high-cost private student loans -- the "alternative" student loan market that had expanded with little federal oversight during the early part of this decade.

That idea is irredeemably bad. Congress should stop it.

The majority of students do not use private loans to pay for college (only 8 percent of college students in the class of 2007 took out private loans, according to the Project on Student Debt).

There are far better alternatives. Even during the current credit crunch, federal Stafford, Perkins and PLUS loans are as available as ever to students and families who qualify.

Source: Modesto Bee