Educational institutions currently have two ways to offer federal loans to students. What are they? (1) In the Federal Family Education Loan (FFEL, pronounced "fell") program, the government pays to banks and lenders to lend money to borrower companies up to 97% of the cost of any loan that is not returned. (2) DLP(direct-loan program), made in 1993 as a different option, in which the government removes the guy in between, lends money directly and gets all the profits.
The health-care debate would seem to help critics of the student-loan plan, who have no qualms about trying to connect both of them. "One of the points we're making is that the parallels to the health-care debate are really eerie," says Marrero. "The DLP was created as an option 16 years ago. It was used as a form of competition that would encourage innovation and keep the industry honest. Sound familiar?" But rather than fuel significant opposition to the student-loan plan, the health-care firestorm has blocked it, making it harder for opponents to rally an effective counterattack. So the question is, can the health care plan really influence student loans? It would be interesting to see if we can hit two birds with one stone.
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