Student Loan – On Student Loan Reform
Last fall, Democrats in Congress were all but certain they would succeed in passing an overhaul of the student loan business. The idea, which President Obama called a “no-brainer,” would allow students to borrow directly from the government through their colleges, and would replace the current system, which pays private companies to provide the loans.
Supporters of the proposal say the change would end government subsidies to private lenders by eliminating the middleman and save the government $80 billion in the next decade. The House of Representatives have already passed a version of the bill which eliminates the portion of the federal lending industry that pays private companies to provide risk-free loans that are guaranteed by the government.
As reported on the front page of Friday’s New York Times, the bill that seemed a certainty four months ago is now facing governmental roadblocks in the path to passing. After the election of Republican Scott Brown to the Senate, Democrats no longer have a filibuster-proof majority, which could stop this Obama- and Democrat-supported motion from passing. Major lending companies are also mounting movements against this reform, painting the motion as hostile federal takeover that will eliminate thousands of jobs. Other Congressional concerns, like the healthcare bill, could leave this former “no-brainer” with a metaphorical lobotomy.
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