Quote Originally Posted by Major Robert Dump View Post
It doesn't come from a government source. Student Loans come from banks, like Sallie Mae, not the government. The government just "backs" the loan up by promising the bank they will buy the debt if the borrower turns out to be a doucehbag, therefore the bank is more likley to give the loan to undeserving borrowers because there is little or no risk involved for the bank.
Ah. So that is different from student loans as we know it over here, which are directly paid out by the government, and likewise the interest on the borrowed money ends up on the government balance sheets. And no, I don't see why anyone would do it any other way. Seems like it merely serves to introduce overhead, and make the whole thing worse by going through the private sector for this.