College Students Rally for Student Loan Legislation on Hill

Published on
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The Washington Post

College Students Rally for Student Loan Legislation on Hill

by
Nick Anderson

College students swarmed Capitol Hill on Tuesday to plead for more financial aid as private lenders made a last push to preserve their endangered role in making federal student loans. (David McNew/Getty Images)

College students swarmed Capitol Hill on Tuesday to plead for more
financial aid as private lenders made a last push to preserve their
endangered role in making federal student loans.

The dueling messages sought to influence potential Senate action
this week on a proposal to cut funding to lenders that make federally
guaranteed loans and channel tens of billions of dollars in savings to
scholarships for needy students.

The proposal is attached to a bill the House approved Sunday that
resolves various differences among congressional Democrats over
health-care reform. That bill is separate from the comprehensive health legislation President Obama signed
into law Tuesday. If the Senate approves the bill without amendment, it
also would go to Obama for his signature. But opponents of the lending
overhaul are seeking to revise it in the Senate to force another vote
in the House.

The opponents face a difficult task because overall Democratic
support for the bill appears to be solidifying in the Senate, even
among senators who have expressed concerns about the lending overhaul,
several Democratic aides said.

One potential swing Democrat on student loan issues is Sen. Bill Nelson (Fla.), who signed a letter
recently urging the Senate to consider alternatives that would not
sacrifice industry jobs. But Dan McLaughlin, a Nelson spokesman, wrote
in an e-mail: "Sen. Nelson likes the education and student loan
reforms. He doesn't like the jobs it could cost in north Florida. But
at this point, it looks like it's in the health-care and education
legislation to stay."

On Monday, Sen. Blanche Lincoln (D-Ark.) criticized the bill for
including "matters unrelated to health care" and said in a statement:
"I cannot support this process." Republicans oppose the lending
overhaul as an unwarranted government takeover.

The measure would save an estimated $61 billion over 10 years by
cutting out private lenders the Obama administration describes as
needless go-betweens and expanding direct government lending. It would
provide $36 billion in Pell grants for students from low- and
moderate-income families, including $13.5 billion to plug a shortfall
this year because rising numbers of students are eligible for aid.

The United States Student Association rallied hundreds of members on
Capitol Hill for the bill. They waved signs -- "Students NOT Banks!"
and "$ Now!" -- and chanted slogans that underscored the fiscal straits
universities face as they raise tuition. "They say, 'Cut back!' "
students yelled. "We say, 'Fight back!' "

"I'm an independent student," said Sabrina Ford, 19, of Ypsilanti,
Mich., a financial aid recipient in her first year at Eastern Michigan
University. "If the Pell grants are cut, I have no idea how I would pay
for education. Right now, I rely on myself and the government to assist
me."

Lenders say that they also favor cutting government subsidies but
that an overhaul should preserve a role for their industry in
originating loans. SLM Corp., the industry leader known as Sallie Mae,
says the bill would force the company to shed 2,500 jobs.

"The student loan provisions buried in the health-care legislation
intentionally eliminate private sector jobs at a time when our country
can least afford to lose them," Sallie Mae said in a statement issued
through spokeswoman Martha Holler. "We are profoundly disappointed that
thousands of student loan originators will soon lose their jobs --
although the Senate has the power to change this."

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