Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

April 25, 2009

MAKING STUDENT LOAN REFORM POSSIBLE.... This should be a no-brainer. The student-loan industry is getting government subsidies to provide a service the government can perform for less. Obama can remove the middle-man, streamline the process, save taxpayers a lot money, and help more young people get college degrees.

Lobbyists, Republicans, and Democrats with the student-loan industry in their districts not only oppose reform, but have the votes to sustain a filibuster to prevent the changes from passing. It's why there were two key angles to the reconciliation breakthrough this week. The first, obviously, was health care. But the second was making student-loan reform possible, too.

The procedural shortcut, known as reconciliation, would make it far easier to pass Obama's student loan plan -- which has drawn opposition from lawmakers in both parties -- as well as his proposal to expand health coverage for the uninsured. Reconciliation bills are tax or spending measures that cannot be blocked by filibuster, meaning the Senate needs only 51 votes to pass them instead of the usual 60. Democrats hold 58 Senate seats.

Supporters of Obama's agenda cheered the agreement. In a conference call with reporters, Education Secretary Arne Duncan called it "a very, very encouraging sign" that Congress will act to "transform the educational opportunities of millions of students for years to come."

Before this week, the biggest hurdle for changing the system has been Sen. Ben Nelson (D) of Nebraska, a conservative Democrat who has vowed to do whatever it takes to derail the White House plan to streamline the federal student-loan program. For Nelson, government subsidies for private student lenders is a key industry in Nebraska, and with him working with the GOP on this, the chances of overcoming Republican obstruction with 60 votes was almost impossible.

This week, the president found a way to go around Nelson. Here's hoping it's not the last time.

Steve Benen 12:20 PM Permalink | Trackbacks | Comments (18)

Bookmark and Share

This is excellent news. One good aspect is that it serves as a signal to Nelson that attempting to be the 58th vote (59th when Coleman exhausts his appeals) has costs. Nelson clearly chose to present himself as the rightmost Democrat and therefore a very powerful person (he has competition for Bayh of course).

Now he is not going to get his way on his personal pet issue.

In a way it's almost a pity that, on the merits, it's such a no brainer. If Nelson had half a leg to stand on, Obama could have sent a clearer signal that there are costs as well as benefits from being the rightmost Democrat in the Senate.

Posted by: Robert Waldmann on April 25, 2009 at 12:32 PM | PERMALINK

Fuck Ben Nelson and his ilk that want to hold the taxpayer hostage to their skimming operations. They're lucky that the government doesn't use the RICO statute to go after them.

Posted by: OhNoNotAgain on April 25, 2009 at 12:35 PM | PERMALINK

This would impact the so-called Grad Plus loans, right? If so, any word as to whether people who've taken out those loans could renegotiate them for a lower interest rate?

Posted by: wilder on April 25, 2009 at 12:38 PM | PERMALINK

With savings plans destroyed in the stock market crash, I imagine more people will be needing loans if they plan to go to college. This is very good news.

Posted by: CDW on April 25, 2009 at 12:50 PM | PERMALINK

This is a very key item for Obama's education plan-- more affordable loans = more people going to school. Hypothetically, if more people go to school the less school might cost, right? Or at least stave off the skyrocketing increases?

Ideally, school loans should have ridiculously low interest rates and whatever interest is paid should be just enough for the management of the loans. I'd love it if education loans became a non-profit business.

Posted by: zoe kentucky on April 25, 2009 at 1:07 PM | PERMALINK

Fuck Ben Nelson and his ilk that want to hold the taxpayer hostage to their skimming operations. They're lucky that the government doesn't use the RICO statute to go after them.

I was only trying to create jobs to stimulate the economy. So what if I did it before the economy hit the skids. You don't be so mean about it. People like me, who are ahead of their time, are always so misunderstood.

Posted by: Ben Nelson on April 25, 2009 at 1:10 PM | PERMALINK

"Fuck Ben Nelson and his ilk that want to hold the taxpayer hostage to their skimming operations. They're lucky that the government doesn't use the RICO statute to go after them."
OhNoNotAgain 12:35 PM

Can't be repeated often enough.

Posted by: Conrads Ghost on April 25, 2009 at 1:44 PM | PERMALINK

Fuck Ben Nelson and his ilk that want to hold the taxpayer hostage to their skimming operations. They're lucky that the government doesn't use the RICO statute to go after them.

Eh, Nelson is doing his job representing his state. It's the Republicans who oppose this out of some misconceived ideological zeal that makes no sense who really deserve the scorn. Nelson is saying, more or less, "I serve my constituents, and this plan, while good for the rest of the country, is bad for Nebraska, so I'm going to vote against it."

The Republicans have no such coherent explanation of their policy - just a lot of nonsensical garbage about the free market.

Posted by: John on April 25, 2009 at 2:00 PM | PERMALINK

Big Ben Nelson needs to realize that in 2 years the Dems are going to get 4-5 more seats (KY, NH, NC, MO, OH) while losing possibly one (CO). This is going to give Obama a big enough margin that Nelson is going to be expendable. Obama has a memory, and he knows he won't be winning (or needing to win) NE. Nelson will find himself serously on the outs.

Couldn't happen to a more deserving guy.

Posted by: Mimikatz on April 25, 2009 at 2:26 PM | PERMALINK

This is good news. The current state of student loan management is, to me, one of the biggest examples of the dangers of blind ideology trumping logic and practicality.

I attended collage in the late 80s/early 90s when student loans WERE a government-run operation. My loans were easy to get, low interest rate, and easy to pay off. Granted, college was a lot less expensive then, but I was amazed at the amount of hassle, red tape, and corruption introduced by the time a friend was dealing with his student loans over the past few years.

So, according to Republican thought, free market does anything better than government, so they shift student loans from government agencies to private, for-profit banks. Of course, you're talking about a class of people with almost no established credit, and no guarantee of income to replay, asking for incredible sums of money to be loaned to them ... not generally the first-rate customers for-profit banks are really looking for. So government has to turn around and subsidize "free market," and all the layers of expense and corruption we now see are introduced into the system.

This really, really should be a no-brainer.

Posted by: cooner on April 25, 2009 at 2:31 PM | PERMALINK

President Obama framed this perfectly in his announcement yesterday. He even fired a preemptive strike at those who will oppose this by telling why his plan is better - it will save taxpayer money and help more students. A win-win... except for the banks involved in this.

Posted by: Hannah on April 25, 2009 at 3:22 PM | PERMALINK

Sen. Ben Nelson is one of the Senators blocking approval of Dawn Johnsen, Obama's nominee for head of Office of Legal Council (OLC), based on her stand on social issues (women's rights). Apparently, many years ago, in footnotes, she expressed her right to choose views. Now, Nelson and others in the Senate are threatening to block her appointment, maybe even filibuster. They claim that her radical social views make her a poor candidate. Same old Washington political circus. Nelson may be a Democrat, but he sure isn't acting like one. Perhaps he hasn't gotten the message: With you or without you, change is coming!

Posted by: Carol A on April 25, 2009 at 4:28 PM | PERMALINK

While we´re at it, why don´t we build high schools and societies so that people without college degrees are systematically discriminated against for job promotions?

Posted by: inkadu on April 25, 2009 at 5:07 PM | PERMALINK

Eh, Nelson is doing his job representing his state. -- John, @14:00

Well, not really, unless his state consists entirely (or, at least, in great majority) of student lenders, with close to zero constituents who are either students or parents of same. In a situation where the second segment of the population (students and their parents) counts more people than the first segment (lenders), he's shorting a large slice of population to service a smaller one. Letting a few skim off all the cream while the rest have to make do with "blue" milk smells a tad rancid and, perhaps, self-serving rather than constituent-serving.

Posted by: exlibra on April 25, 2009 at 6:03 PM | PERMALINK

Nelson is only concerned with the profiteers. If he spent as much time trying to find alternative employment for those involved in the student loan industry then he would not be such an obstruction to progress for the millions who stand to gain from Obama's initiative for the sake of a few who are employed by those who profiteer the most.

Nelson (both of them actually) stand in the way of a progressive agenda under the guise of conservatism which in their personal cases means protecting the holdings of the wealthy and living very well from it. They stand against the majority of Americans and are dupes for republicans. These are the DINOs our party needs to get rid of. They fear change the most.

Posted by: bjobotts on April 25, 2009 at 6:20 PM | PERMALINK

Shouldn't something that will directly affect Federal finances to the good (getting rid of a subsidy), be in the Budget anyway?

Posted by: Doug on April 25, 2009 at 6:38 PM | PERMALINK

btw...college was free in California before Reagan. Republicans believe in the dumbing down of America, they got civics removed so people today never learned how government is supposed to work. They worked very hard to make college 'unaffordable' to keep the rif-raff out.

Republicans should be barred from government after the past 30yrs of trying to make sure it won't work.

Posted by: bjobotts on April 25, 2009 at 6:42 PM | PERMALINK

"...only 51 votes to pass them instead of the usual 60."

The usual 60?!?!? WTF? I guess the Senate really is broken.

Posted by: sidewinder on April 25, 2009 at 7:24 PM | PERMALINK



Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM

buy from Amazon and
support the Monthly