Student Loan Reform In Danger
The New York Times reports today that aggressive lobbying by top student lenders like Sallie Mae may derail Obama’s plans for reforming the student loan industry.
Obama’s plan is to cut out federal subsidies to private lenders and loan the money directly to students instead, a plan that a Congressional Budget Office analysis says could save approximately $80 billion dollars over the next ten years. That money would then go to “expanding direct Pell Grants to students, establishing $10,000 tax credits for families with loans, and forgiving debts eventually for students who go into public service, administration officials say.”
Unsurprisingly, the student loan industry is, like virtually every other industry/political group/person who is anti-Obama, mounting the now-familiar “Bolshevik Plot” defense:
The student loan industry, which would be forced out of the loan origination business if the proposal became law, is seeking to cast the administration’s plan as an ill-conceived government takeover that could put thousands of people out of work at private lending centers around the country at a time when unemployment is hovering around 10 percent.
While I don’t think Obama’s plan goes far enough – what about all of us who are already under the student loan industry’s thumb? – it’s certainly a good start. The student loan industry lobbyists will be contacting your senators and congressman – if you care about student loan reform, so should you.