In the fall of 2007, when the U.S. economy first seemed in peril, I began answering reader queries here on the Business Desk. I still do so occasionally, but this page has expanded to include posts from eminent economists, "far-flung correspondents," and a variety of voices that have intriguing and/or useful things to say about economics, broadly defined. Please feel encouraged to respond to any and all of them.
Question: Who regulates the student loan industry to stop the practice of gouging young people with excessive interest charges added to their principal when they "defer" payment ...the govt doesn't pay the interest and the loans mushroom.
Paul Solman: As best I can tell, it's the Department of Education. The main initiative to stop the "gouging" is a bill proposed by President Obama in the spring, passed by the House in September, and now making its way through the Senate. It would make all student lending a direct responsibility of the Dept. of Education, rather than what we currently have: a private student loan industry that's federally guaranteed.