Democratic California Rep. Maxine Waters challenged bank executives during a Wednesday morning hearing, appearing to blame them for the student debt crisis.
What she appeared to leave out was the fact that student loans were nationalized nearly a decade ago under former President Barack Obama to cut banks’ ability to offer government-backed loans.
“By cutting out the middleman, we’ll save the American taxpayers $68 billion in the coming years,” Obama said when he signed the legislation in 2010. “That’s real money.”
Waters now chairs the committee that oversees those student loans.
Waters began by explaining the student debt crisis, saying, “Today, there are more than 44 million Americans that owe … $1.56 trillion in student loan debt.”
She added, “Last year, 1 million student loan borrowers defaulted which is on top of the 1 million borrowers who defaulted the year before.”
Then, Waters turned the questions on the bank executives, asking what they intended to do about the student debt crisis: “What are you guys doing to help us with the student loan debt? Who would like to answer first? Mr. Monihan? Big bank?”
“We stopped making student loans in 2007 or so,” he responded.
“So you don’t do it anymore? Mr. Corbyn?” she pressed the next banker.
“We exited student lending in 2009,” he replied.
“Mr. Dimon?” Waters tried again.
“When the government took over student lending in 2010, we stopped doing all student lending,” he said.
Fox Business host Stuart Varney played a clip from Wednesday’s hearing, then noted that as chair of the Financial Services Committee, Waters should have known that all student loans were nationalized in 2010. Therefore, none of the bank executives she questioned had any control over the student debt crisis.
“That was interesting, was it not?” he asked. “It appeared to me that Maxine Waters, who chairs the House Financial Services Committee, did not know that the government had nationalized student loans 10 years ago. I don’t believe she knows that. She chairs a committee which regulates the banks.”
Author: Virginia Kruta