Obama Wants To Reform Student Loans

According to a statement on Friday published on the nydailynews.com website, President Obama wants to restore the government's role as the primary financier for college educations and end the federally subsidized student loan program using private lenders.

"This is not about growing the size of government or relying on the free market - because it's not a free market when we have a student loan system that's rigged to reward private lenders without any risk," Obama said.

He continued "It's about whether we want to give tens of billions of tax dollars to special interests or whether we want to make college more affordable for 8-1/2 million more students."

In the 1970s the federal government gave out many more loans. A significant reduction was implemented during the Bush era, when private lenders came to the fore.

The private Federal Family Education Loan program, which charges flexible, but often high interest rates is in the president's sights. Taxpayers stand to gain by $4billion a year if the government returned to being the lender and backer of student loans.

Education Department data shows around 30% of college students rely on student loans. According to industry statistics, roughly 76% of all student loans in the past two years were provided by private lenders .