Rep. Maxine Waters (D-CA) failed miserably when she tried to blame the student loan crisis on big banks–despite President Obama nationalizing student loan programs in 2010.
During a House Financial Services Committee hearing earlier this morning, Waters said, “Today there are more than 44 million Americans that owe … $1.56 trillion in student loan debt. Last year, 1 million student loan borrowers defaulted which is on top of the 1 million borrowers who defaulted the year before.”
She then asked bank executives, “What are you guys doing to help us with the student loan debt? Who would like to answer first? Mr. Monihan? Big bank?”
“We stopped making student loans in 2007 or so,” he responded.
“So you don’t do it anymore?” she asked before moving on to the next banker, “Mr. Corbyn?”
He replied “We exited student lending in 2009.”
Waters moved on, “Mr. Dimon?”
“When the government took over student lending in 2010, we stopped doing all student lending,” he replied.
Investors Business Daily points out that due to the nationalization of student loans, federal student loan debt skyrocketed from $153.9 billion in 2009 to $1.1 trillion by the end of 2017:
In 2010, President Obama effectively nationalized student lending by cutting banks — which had been offering government-backed loans to students — out of the equation and having the government make the loans itself.
“By cutting out the middleman, we’ll save the American taxpayers $68 billion in the coming years,” Obama said when he signed this change into law. “That’s real money.”
As a result, federal student loan debt shot up from $154.9 billion in 2009 to $1.1 trillion by the end of 2017.