Maxine Waters Gets Schooled On Student Loan Crisis: The Government Funded It, Not The Banks

During a House Financial Services Committee hearing with “megabank” representatives, Maxine Waters got schooled on the student loan crisis in America after she attempted to blame the big banks.

United States’ Several largest banks had representatives present to discuss the recovery and sustainability of our financial system ten years after the 2008 recession.

During the hearing, Maxine Waters attempted to tie the current student loan crisis to the big banks, asking the present representatives to explain what they are doing to help students. To Waters’ surprise, none of the banks she questioned had taken part in financing student loans, largely because the government took that over.

“Today, there are more than 44 million Americans that owe — there’s a student loan crisis. $1.56 trillion in student debt. Last month, this committee received testimony that, last year, 1 million student loan borrowers defaulted, which was on top of the 1 million borrowers who defaulted the year before. What are you guys doing to help us with the student loan debt? Who would like to answer first?”

None of the bankers stepped forward to answer her question because none of them were involved in student lending. Waters was forced to call on CEO and chairman of Bank of America, Brian T. Moynihan.

“We stopped making student loans in 2007 or so,” Moynihan explained, catching Maxine Waters totally off guard.

The CEO and chairman of Citigroup, Michael L. Corbat, noted that his bank exited in 2009.

JPMorgan Chase’s CEO and chairman, Jamie Dimon, put an even clearer point with his answer, directly pointing to government intervention as his bank’s reasoning for abandoning student loans.

“When the government took over student lending in 2010 or so, we stopped doing all student lending,” Dimon explained.

As the bankers noted, our government largely took over student lending and, under former President Barack Obama, they even added about $1 trillion to the total student loan burden.

It really looks as though there is a monolith who is responsible for giving students loans they cannot afford to pay back, it just isn’t the banking industry — it is the U.S. government.

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