Banks Call the Kettle Black

04/01/2009 05:12 am ET | Updated May 25, 2011
  • Mark Miller Reuters columnist and author of The Hard Times Guide to Retirement Security

What industry is least qualified to question the competence of others to handle money right now? Would you guess . . . the banking industry, maybe?

Not if you're a banker, of course. Firing back at the Obama Administration's plan to end federal subsidies to lenders who provide tuition loans to college students, the Consumer Bankers Association questioned "the ability of the Education Department to handle more than $60 billion a year in federal loans to students and families," according to The New York Times.

The size of existing federal loan programs would grow, and more families would be eligible to participate. And in perhaps the most controversial provision, the administration would lend directly to students and end its support of federally guaranteed student loans made by banks and other private companies.

"Rather than continuing to subsidize banks," said the education secretary, Arne Duncan, "we want to help more students."

So . . . bankers worry that the federal Education Department won't do as good a job lending money to college students as they would.

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