It doesn't save the taxpayers any money if the government makes foolish loans that can't be repaid that nobody would have ever lent out if their own money was on the hook instead, nor does it save the taxpayers any money if the government provides easy, free money that causes unnaturally skyrocketing tuition followed by an unnatural higher ed crash.
An awfully expensive $70B over ten years, I think.
The savings of $70B comes from eliminating a profit layer that was enjoyed by the banks.
The government insured the loans before and after the change in 2010. So the taxpayer was on the hook for losses. Now it is still on the hook for losses, but also benefits from profits.
The $70B is simply from cutting out the middleman.
A profit layer that also prevented those other things from happening. These things can not be considered in isolation. People are more careful with their own money than the free money the government provides. We prevented the eeeeeviiil profit mongering bank bastards from making money, at the cost of encumbering millions upon millions with debt, and who knows what damage we're going to witness to the higher ed system over the next few years.
Will it have been worth all this damage to prevent the eeeeeeviiiiil profiters? It really already wasn't, and the accounting for the evil of our current policy is only going to get worse.
Basically we are publicly subsidizing education. Will it be worth it? Well, history has shown education to be a better investment than subsidizing the risks of private institutions. I'm betting it will be.
We wouldn't behaving this discussion if we had not created a situation via government meddling in which education is frequently not a good investment.
Don't deal in the fuzzy-wuzzies of how wonderful education is in a perfect world. Deal with the world in front of you, the one on the news, the one generating a trillion dollars in crushing debt on those least able to pay it back. People are exploiting your willingness to hide in glib, pretty generalities.
An awfully expensive $70B over ten years, I think.