The Department of Education: America's Really Big Subprime Lender

The Washington Post reports:

The Education Department has grown into one of the biggest money lenders in the country, overseeing a $1.2 trillion portfolio of student debt rivaling the entire loan business of JPMorgan Chase with a staff roughly the size of the National Weather Service.

But instead of fulfilling a presidential mission of remaking and simplifying a confusing and corrupt system that enriched financial firms at the expense of taxpayers — and ultimately the nation’s college students — serious problems have emerged.

The government hired contractors to service and collect the loans, but state and federal authorities have accused the companies of ignoring borrowers’ requests for help, misleading them about their rights and mismanaging their payments. And while the government charges families lower interest rates than what banks typically offer, it is still making money on the program, raising questions about how it should balance its obligations to families and to taxpayers.

The creeping socialism movement in America. How long before Uncle Sugar gets into the credit card business?