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This year it could not renew that arrangement and is having to finance the loans itself.
The loans to manufacturers often come with interest rates of around 4 percent; the state obtains the loans itself and passes the funds onto to the manufacturers without a premium.
The House of Representatives yesterday passed a bill that would abolish the loan guarantees and subsidies, and allow the federal government to make all new federal college loans itself.
President Bush's 2007 budget shows, for instance, that it's four times as expensive for the government to subsidize and guarantee private loans as for it to issue those loans itself.
Block, for example, has always emphasized that rather than make the loans itself, it helps customers obtain them from lenders -- now exclusively Household Bank, and before that mainly Beneficial Finance, which Household's parent company bought last year.
According to the Bush Administration's own figures, it costs the government four times as much to back private loans as to make the loans itself, and the Obama Administration estimates that getting rid of the subsidies and guarantees will save close to $90 billion.
Similar(51)
The loan itself cost $78 this year.
But Fannie and Freddie categorized loans as prime or subprime based on the lender rather than on the loan itself.
Fannie Mae and Freddie Mac, however, categorized loans as prime or subprime based on the lender rather than on the loan itself.
Federal prosecutors have not alleged that anything about the loan itself was improper.
For a bridge loan, most lenders do not use the bridge loan itself in calculating the debt.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com