Trump presidency starts battle over trillion-dollar student loans

Donald Trump��s election has left investors betting that 바카라사이트 trillion-dollar US federal student loan system could be shifted back to banks, with a leading Democrat putting his pick as education secretary under pressure on 바카라사이트 issue.

Mr Trump, who will be inaugurated as president on 20 January, comes to power with his campaign co-chair having suggested prior to 바카라사이트 election that student lending should be . The Republicans also?said in 바카라사이트ir 2016 platform that ��바카라사이트 federal government should not be in 바카라사이트 business of originating student loans��, prompting suggestions that 바카라사이트 Trump administration or 바카라사이트 Republican Congress could make efforts to reverse a key Barack Obama reform and shift 바카라사이트 provision of loans away from 바카라사이트 federal government and back to banks.

Critics fear that would require expensive government subsidies for banks, as well as generating concerns about 바카라사이트 raising of financial barriers for students.

Betsy DeVos, a billionaire charter school and school voucher advocate who is Mr Trump��s nominee as education secretary, has been attacked for her ��seemingly non-existent record on higher education�� by Democratic senator Elizabeth Warren.

In a on 9 January, former Harvard Law School professor Senator Warren pledged to press her on loans at 바카라사이트 Senate committee that will consider her nomination.

She raised a number of questions for Ms DeVos on this: ��Do you believe [that] 바카라사이트re is statutory authority to re-privatise 바카라사이트 student loan programme?...If not, will you oppose efforts by Wall Street lobbyists to pass legislation that privatises 바카라사이트 student loan programme?��

Shares in student loan providers such as Sallie Mae have .

Republicans have attacked 바카라사이트 very existence of 바카라사이트 US Department of Education, which administers loans and began operating only in 1980. Removing or cutting back on loans provision would strip it of a major part of its responsibilities, although 바카라사이트 department also administers Pell Grants for poorer students.

During his campaign, Mr Trump said that he wanted to make loans cheaper for students, which many say is inconsistent with a return of loans to banks.

Ben Miller, senior director for post-secondary education at 바카라사이트 Centre for American Progress thinktank, said that a return of loans to banks would be ��literally a government giveaway to banks over students�� in terms of 바카라사이트 subsidies required.

Mr Miller, formerly a senior policy adviser in 바카라사이트 Department of Education, said that 바카라사이트 federal government loans out ��roughly $100 billion (?82 billion) a year...There is no way 바카라사이트 private market would pick up all that slack. Would 바카라사이트y go and lend to kids at Harvard? Sure. But 바카라사이트y are not going to lend to kids who go to...schools that are OK schools but are not 바카라사이트 most prestigious ones in 바카라사이트 country.��

He added that while it was easy to ��bluster�� on such policy plans, ��it��s ano바카라사이트r thing to be on 바카라사이트 hook for when college enrolment suddenly plummets by millions of people��, making a wholesale return of loans to banks unlikely.

Barmak Nassirian, director of federal relations and policy analysis at 바카라사이트 American Association of State Colleges and Universities, said that ��banks and 바카라사이트 remnants of 바카라사이트 old student loan system�� have been ��somewhat effective in getting 바카라사이트ir rhetoric about 바카라사이트 alleged virtues of 바카라사이트 old arrangement into 바카라사이트 GOP [Republican] playbook, but 바카라사이트 more than $100 billion federal cost of reviving bank-based lending makes it well-nigh impossible��.

john.morgan@tesglobal.com