Health Care Reform Could Also Reform Student Lending
Posted Mar 17 2010 8:32pm
I don’t want to jinx itI really don’t want to jinx itbut it looks like Congress is poised to pass comprehensive health care reform within the next few days. It’s not perfect (alas, Public Option, you were too beautiful to live), but the status quo is completely out of the question and this legislation will help provide insurance for 30 million Americans who would have gone uninsured without it.
On top of that, lawmakers are sweetening the pot by tackling predatory college lendingcutting out the subsidies for private lenders and instead lending directly to students. Win/win.
The vote on a health care reform bill could turn into a two-for-one deal. Democrats are planning to tack onto the bill an Obama administration plan to reform the federal student loan program.
The administration says the government could save tens of billions of dollars by cutting out banks and lending money directly to students. It’s a risky move that could revive or sink two of the administration’s top priorities.
A Potential ‘Twin Victory’?
Removing private lenders from the federal student loan program was never going to be easy. But why is this proposal now part of the up-or-down vote on the health care bill? Even Education Secretary Arne Duncan says he doesn’t know.
“But I know this is the right thing to do for our nation’s students. It’s the right thing to do for taxpayers,” Duncan says.
Duncan says bypassing private lenders and having the Education Department lend directly to college students would save at least $67 billion. That’s money that could be put back into much more financial aid for needy students and other education programs.
“This is excellent public policy,” said Democratic Sen. Tom Harkin of Iowa, speaking to reporters last week. “It’s also good politics for Democrats and Republicans alike.”
He helped craft the plan to attach the direct lending proposal to the health care bill.
“I also want to add that our bill would reduce the budget deficit yes, you heard me right. Our bill would reduce the deficit by at least $5 billion,” Harkin says.
Harkin called this “sweetening the pot,” but that assumes it would attract the votes to pass both health care and major education legislation. Harkin says it would be a “twin victory.”