Student Loan Reform: What's It Doing in the Health Care Debate?

CBS News ^ | March 10, 2010 | Stephanie Condon

[Zakeet]

The White House and Democratic leaders are considering wrapping a student loan reform bill into the reconciliation "fix it" bill the Senate plans to pass for health care reform. At least nine senators, however, now oppose the plan, complicating Democrats' plans to finish health care reform as quickly as possible.

Why would Democrats wrap student loan reform into the latest health care bill? President Obama's proposed student loan reforms, which would slash subsidies the government gives loan companies like Sallie Mae, would save the government billions of dollars -- a critical point given the health care debate has largely come down to arguments over cost savings.

Additionally, it could give Democrats a clear political victory to pass reforms that would help the thousands of students across the country who last week protested rising higher education costs.

Finally, Mr. Obama has made student loan reform a high priority, and it turns out the health care reconciliation bill may be Democrats' best opportunity to pass it this year: "Democrats can only move one reconciliation package through the Senate until the Congress passes a new budget resolution," the Hill reports. "That means if they do not twin student lending with healthcare reform, lawmakers will have to wait until later this year."

[Zakeet]

To you people who said we couldn't make the ObamaCare bill any worse ... I say just wait until after we get done passing it and we all finally get a chance to read it

[Sir Gawain]

The Obots are out in force in the comments over there. Probably govt workers.

[Buckeye McFrog]

he wants to let you walk away from your student loan balance in 20 years....ten if you take one of Michelle’s public sector “helping jobs”. This will provide enhanced cash flow for liberal universities until it all lands on the books of some future President in twenty years.

[mojitojoe]

[businessprofessor]

The student loan bill has been widely misreported. Reports sound like they are DNC press releases. Democrats want to create a vast new entitlement for higher education. Government control of student loans is the first major step. The past model involved private financing of student loans with a subsidy to pay for the interest rates and interest payments (deferrement and no interest during school). Democrats have long criticized this arrangement arguing that subsidies were costing money that could be saved by direct lending. This thinking is backwards. The subsidy allowed private financing of higher education. Democrat savings in subsidies are just higher government spending. Democrats have proposed a whole range of changes that will allow students to either not repay or pay much lower amounts.

Do not be fooled by Democrat propaganda about savings. Democrats are trying to create a vast new entitlement.