re: #4 KingKenrod

So how exactly is something like this supposed to work? The Fed loans money to banks at 0.75%, but it’s very short term loans - overnight to 30 days (in a crunch). Student loans are long term, years, even decades. If this is only a 1 year rate lowering for new loans, it’s irrelevant, because the rates are just going to go back to normal in a year, or a lower level if Congress acts.

There’s no way this is a permanent lowering of rates for new loans written over the next year - such a thing would cause a run on college seats and tuition would explode.

I also think that using the Fed this way is a bad idea - today student loans, tomorrow what? You can make the case that almost anything the govt does is worthy of being subsidized with cheap money temporarily. Eventually someone will have to pay the going rate.

This is a good question, and will need to be addressed if this idea gets off the ground.

However, why should the big banks get loans at so much less than the going rate?