In an op-ed published in today’s Inside Higher Ed, CP’s Pedro de la Torre and USSA’s President Carmen Berkley advocate on behalf of students over banks, arguing that “Our country faces too many challenges for us to be providing pointless corporate welfare to loan companies.”

Here is an excerpt:

“The president’s plan will save taxpayers $94 billion over 10 years by ending pointless subsidies to loan companies and using government funds to lend directly to students. Because loan repayment is guaranteed by the federal government, private lenders assume very little risk under the FFELP and yet are rewarded handsomely — a subsidy that makes little economic sense. Much of the savings from the move to direct lending would be used to increase the maximum Pell grant award to $5,550 for the 2010-11 school year, and make the Pell grant a mandatory government program guaranteed an increase — inflation plus 1 percent — every year.

There are other important reasons to make the change. For one, the FFELP program is prone to corruption. A 2006 audit of the student lender Nelnet by the U.S. Department of Education’s inspector general revealed that the company had received more than $1 billion in taxpayer subsidies by gaming the system. Another investigation in 2007 led by New York Attorney General Andrew Cuomo found that lenders were lavishing gifts, payments, and other inducements on college financial aid officers in order to encourage them to recommend their loans to unwitting students.”

Check out the full op-ed here!