Plan to Change Student Lending Sets Up a Fight

NYTimes ^ | 4/12/09 | DAVID M. HERSZENHORN

[anniegetyourgun]

WASHINGTON — The private student lending industry and its allies in Congress are maneuvering to thwart a plan by President Obama to end a subsidized loan program and redirect billions of dollars in bank profits to scholarships for needy students.

The plan is the main money-saving component of Mr. Obama’s education agenda, which includes a sweeping overhaul of financial aid programs. The Congressional Budget Office says replacing subsidized loans made by private banks with direct government lending would save $94 billion over the next decade, money that Mr. Obama would use to expand Pell grants for the poorest students.

But the proposal has ignited one of the most fractious policy fights this year.

Because it would make spending on Pell grants mandatory, limiting Congressional control, powerful appropriators are balking at it. Republicans say the plan is proof that Mr. Obama is trying to vastly expand government. Democrats are divided, with lawmakers from districts where lenders are big employers already drawing battle lines.

At the same time, the private loan industry, which would have collapsed without a government rescue last year, has begun lobbying aggressively to save a program that has generated giant profits with very little risk.

[anniegetyourgun]

Next bubble

[MichiganConservative]

What is the constitutional justification for the federal government doing anything with student loans?

[Don Corleone]

It boggles the mind to think of how long the socialists have been planning these events to have them shovel ready so soon after they overthrew the Republic.There is no venue of our freedom that they seem to have overlooked.

[rbg81]

Let me guess: student loans no longer go to white people?

[Jeff Chandler]

Si.

[babyfreep]

ping

[I_like_good_things_too]

Ha hahaha ha ha ha. Oh, are you serious?

[GOP Poet]

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