Bank of America Corp, after getting billons in various bailout funds, has decided to suspend its federally-backed student loan program. The program that allowed the BofA and others to scam billions from it, due to its loopholes placed there by financial industry lobbyists, is the in the process of being modified to close those loopholes. Their lobbyists have been trying to kill The Student Aid and Fiscal Responsibility Act of 2009 that would replace the money-well FFELP program with direct government loans. It has passed the U.S. House of Representatives and is awaiting a Senate vote, where the lobbyists have been pouring money into the pockets of various Senators. It is strongly supported by President Obama and widely expected to become law, since even the most corrupt Senators hesitate on voting for this kind of pork.
Bank of America was the fourth largest lender under the program in fiscal year 2008, issuing $4.8 billion in new loans and raking in billions more in profits, according to U.S. Department of Education data.
The program, created in 1965, is a public-private program designed to allow banks to make student loans and suck up billions in fraudulent fees from the government.