As predicted, student loan companies aren't too happy with Obama's proposal to eliminate government subsidized third-party student loans and use the savings to fund more student aid.

The Knoxville News Sentinel has a good report today with reaction from student lender Edamerica and student loan processor Edfinancial, who oppose the changes.

Sen. Alexander, Sen. Corker, and Rep. Duncan all oppose it, too. Sen. Alexander proposed an amendment that would preserve the third-party loan program. The problem is, Obama's plan to expand student aid is centered on savings of $94 billion currently used to subsidize third-party lender profits. The amendment would effectively gut Obama's plan, which one think tank says would fund an additional 5200+ Pell Grants in Tennessee alone.

Rep. Duncan in his usual free-market style says he has "never seen anything the federal government could do more economically or more efficiently than the private sector." Perhaps Mr. Duncan is not familiar with Medicare and SCHIP? Or the United States Navy?

PREVIOUSLY AT KNOXVIEWS: Obama budget expands Pell grants, other student aid