In 2010, President Obama began a program of federalizing student loans in order to eliminate the banks, whom he saw as merely expensive middlemen, from the process. However, instead of saving money, as he implied this would do so, student debt has zoomed up 71% since he took office; going from $0.7 trillion to $1.2 trillion. In the same time period, inflation rose only 10%.
The reality here is that the private sector was doing just fine in managing student debt. The restrictions they placed on borrowing resulted in less debt and less defaults.
The President's free-wheeling federalization of debt has produced the opposite effect because, as usual, the last entity you want involved in managing money is the federal government, who can't even manage its own massive debt problems. Just think about that when you hear Hillary Clinton and Bernie Sanders touting debt-free, tuition-free college.
Chart Source: Fortune.com: Obama's Economy in 7 Charts: The Good, The Bad, and The Ugly: http://fortune.com/2016/01/12/obama-economy-charts/
Obama's Balloon: Federal Student Loan Debt Up 517% in 5 Years: http://cnsnews.com/news/article/ali-meyer/obamas-balloon-federal-student-loan-debt-517-5-years
Obama’s $1.2 Trillion Student Loan Program Is Falling Apart: http://www.investors.com/politics/editorials/obama-student-loan-program-is-falling-apart/
Study: 27% of Student Loans in Default: http://www.breitbart.com/big-government/2015/04/15/study-over-27-of-student-loans-are-in-default/
Student-Loan Defaults Are Still Soaring Thanks to Washington's Neglect: http://www.theatlantic.com/business/archive/2013/10/student-loan-defaults-are-still-soaring-thanks-to-washingtons-neglect/280158/