CEO of major banks informed Rep. Maxine Waters (D., Calif.) that the federal government nationalized student loan programs in 2010, after she grilled them for not offering these programs during a Congressional hearing last Wednesday.
Waters, the ranking member of the House Financial Services Committee, posed her questions to a panel of seven CEOs of America's largest banks in a hearing reviewing their activities since the 2008 financial crisis.
"What are you guys doing to help us with this student loan debt?" Waters asked. "Who would like to answer first? Mr. Monahan, big bank."
"We stopped making student loans in 2007 or so,"said Bank of America CEO Brian Monahan.
"Oh, so you don't do it anymore," Waters said, before turning to Citigroup CEO Michael Corbat.
"We exited student lending in 2009," he said.
She posed the same question to JPMorgan Chase CEO Jamie Dimon, who explained, "When the government took over student lending in 2010 or so, we stopped doing all student lending."
Waters then changed the subject small business, asking CEOs why they have not lent more to small businesses since the financial crisis. After one question, she forfeited her time.
The Department of Education under former President Barack Obama's administration took over student loan programs from big banks in 2010, after the financial crisis and the passage of the Affordable Care Act.
"Now is the time to allocate resources to students—not to banks—so they have access to college and other educational opportunities," Secretary of Education Arne Duncan wrote in an opinions piece for the Wall Street Journal at the time.
According to Investors Business Daily, the nationalization of student loan programs has coincided with an explosion in college debts, with an increase from $517 billion to $1.3 trillion during the period of 2006 to 2019. In that same period, the starting salaries of students graduating college has remained flat.