Stafford, PLUS, etc., were third party lenders lending their own money to students under a government-guaranteed loan program before they got folded into the government program.

From here:

^Source of Funds. In the FFEL program the funds for the loans come from banks and other financial institutions. In the Direct Loan program the funds for the loans come directly from the US Department of Education, which in turn gets the funds from the US Treasury.^

^(During the credit crisis many lenders, especially non-bank lenders and state loan agencies, are borrowing funds from the US Department of Education in order to continue making new loans. These lenders previously obtained funding from investors, but were unable to raise funds from the capital markets because of the credit crisis. Many banks, on the other hand, can rely on customer deposits as a source of funds and so are not as dependent on the US Department of Education for funding to continue making federal education loans. More than two-thirds (68%) of FFELP loan volume was funded in part by the US Department of Education in FY2008; almost one-third (32%) was not.)^

^Overall, though, the source of funds does not matter much from a borrower's perspective. Money is fungible; it is green regardless of whether it comes from the federal government or a financial institution.^

From here:

^Note: Before July 1, 2010, Stafford, PLUS, and Consolidation Loans were also made by private lenders under the Federal Family Education Loan (FFELSM) Program. As a result of recent legislation, no further loans will be made under the FFEL Program beginning July 1, 2010. All new Stafford, PLUS, and Consolidation Loans will come directly from the Department under the Direct Loan Program.^

Go look up all the "credit crisis" stories pertaining to banks and private loan issuers. If they weren't the source of the money, there wouldn't have BEEN a credit crisis in that category and they wouldn't have needed to suddenly borrow Federal cash to cover something they'd been covering themselves before. Here's one story. Here's another.

The chart you show is debt levels, not loans made.

for God's sake people, stop throwing WIKIS at me. All the "Lawbrain" source shows is that the person who plugged that article into the web is making the same mistake you are.