
Actual photo, one of Sallie Mae's corporate jets: Model IAI-1125A Astra SPX, reg #N188AK (see ID on right engine)
The push by lobbyists of Citibank, JP Morgan, Sallie Mae and other student lenders to kill student loan reform is working.
Kent Conrad is trying to keep the President’s plan from going through reconciliation this year, which means it can’t pass for another year — and guarantees that the Wall Street banks can keep carving out their billions in annual fees.
Says Tim Ranzetta over at Student Lending Analytics, “Hmmm…the Democrats are opposing their own party’s bill.”
From the New York Times:
Provisions in a budget reconciliation bill must meet budget targets for reducing the federal deficit. Mr. Conrad said the education bill could no longer meet that requirement because the projected savings from ending the payments to private student lenders had decreased, according to a recent cost analysis by the Congressional Budget Office, while the cost of expanding Pell grants had grown. As a result, he said the bill as currently written would no longer reduce the deficit.
The House bill was projected to save $87 billion over 10 years and would have spent $87 billion on Pell grants and other education initiatives. Mr. Reid’s office said a more recent estimate showed the bill would increase future deficits by about $36 billion.
Yes, the new CBO score projects lower savings. Why would that be? Because so many schools have already switched to direct lending since SAFRA passed the House, and the savings are already being achieved, per the Washington Post.
That’s why George Miller and others are (rightly) asking Conrad to go with the old CBO score. For purposes of measuring future savings, rational people would think that if the program is already saving money, that means the claims about cost savings are true, and Conrad wouldn’t penalize students and colleges for that.
But, Conrad doesn’t want student loan reform to pass. Why? Well, because the student lending industry has jobs in North Dakota. Fifty-seven, to be exact. Blanche Lincoln, Jim Webb, Mark Warner, Tom Carper and the Nelson twins are helping him, because they’ve got jobs in their states too. From companies with deep pockets, private jets and personal golf courses to keep up.
According to the Wall Street Journal, Dick Durbin “said Tuesday that the loan package would probably be scuttled unless it helped build support for the health-care bill.”
So how are these Senators valuing jobs in their states, relative to the number of students in college who would be affected by this bill? Good question. Let’s look:
| Senator | State | Industry Jobs | Undergraduates |
| Blanche Lincoln | AR | 92 | 84,234 |
| Warner, Webb | VA | 833 | 266,589 |
| Tom Carper | DE | 31 | 174,002 |
| Ben Nelson | NE | 891 | 72,648 |
| Bill Nelson | FL | 1210 | 519,768 |
| Dick Durbin | IL | 1383 | 428,713 |
| Kent Conrad | ND | 57 | 31931 |
But, students aren’t sucking up government money to buy private planes for themselves, so they don’t have all that lobbying cash to throw around.
As I wrote earlier, SAFRA would not by any means eliminate all private student lending jobs — only the origination jobs, which represent a small percentage of those in the industry. Because Sallie Mae had to bring 3500 jobs back to the US in order to qualify for servicing contracts on the government’s direct loans, as Dave Dayen noted, there’s a good possibility that SAFRA would mean a net gain of jobs in the student lending industry in the US. And that doesn’t factor in the number of jobs saved or gained in education as a result of the $4.7 billion that would go to colleges across the nation in 2010 alone.
So why are these Senators ready to kill this opportunity to pass student lending? Well, because one way or another, the big banks always win. They carved out a sweet and completely unnecessary business for themselves by lobbying Congress for pennies on the dollars, and guess who gets to pick up the tab?
You. Me. Anyone who’s ever had a student loan. To see how private student lenders jack up fees and padded loans so people wound up paying twice the amount of the original loan, see David Brancaccio’s piece on PBS Now.
Enough with Wall Street banking lobbyists. They’re destroying the country and now they want to scrap the higher education system so they can afford their private planes.
Jet fuel doesn’t pay for itself, you know.
We’re going to take out ads in student papers in the above states, and those of other Senators who have been active in blocking the bill, letting students know how their interests are being sacrificed to Wall Street. If you’d like to donate, you can do it here.
And sign the petition — tell Congress to pass student loan reform now. Not next year.
(photo from Richard Eskow, Nightline)





28 Comments

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About FDL Action
What’s that Jeff Goldbloom line in “The Big Chill” about rationalizing?
I’ve donated again, Jane. I think this is almost as big an issue, or should be, as HCR. This is our future.
affordable higher education will be one of the few key factors determining if we completely lose the middle class in this country or not
Thanks so much, Kris. This money in this bill is for community colleges and state schools, lots of minority kids who are out of work and want to enroll in community college to get better skills so they qualify for higher paying jobs. Enrollment is surging. But they’re having to cut those programs just to stay open.
We’re trying to do some action with other groups at campuses across the country.
thanks for your coverage of this Jane. Much appreciated.
Banks and Tanks – it’s what America is all about!
That’s a great line — “banks and tanks.”
gonna use that
Only made it to the title of your article Jane and had to post, lol.
These things do not have to be mutually exclusive now do they?
Fair loans, not more drones.
Wow! there is Dick Durbin again folks.trying to scuttle another bill that
helps ordinary Americans ,folks sooner more than later I hope we see these creeps for who they are,real bad people.
Look for the dance,they will support 1 progressive bill,then they will go the other way on 4 bills that don’t help ordinary Americans.
Just take a look at Lieberman,he is now out front championing repeal of DADT.His re-election is coming in 2yrs.
Why do I keep hearing that Debbie Stabenow is a stalwart Progressive from some radio hosts ? Hmmmmmm…..Is she up for re-election this year ?
Carper is DE, not MD
What a bunch of shithead politicians.
That’s an important point. It’s also important to keep in mind that it’s key to the American economy remaining powerful. China and India can produce more engineering and science graduates now than we do. Making college less affordable is just going to make that situation worse.
Just for fun I searched at open secrets to see who is the top political donor in my zip code (92064).
Turns out it is a guy by the name of Cary Katz who is CEO of “College Loan Corporation”.
According to the open secrets database, Katz and his wife contributed $369,850.00 since 2000.
All of it to republicans.
For the 2008 cycle alone, they shelled out $55,100.00. All to republicans.
Must be a pretty lucrative business if they have that much to spend on political contributions.
So do you think the Dems want a share of it or are they going to do something to make our country a better place?
I think it’s the former but like all good conservatives, Conrad thinks that only students who can afford it should go to college. Let the rest join the military. Then if they can survive the shooting galleries of Iraq and Afghanistan and if they are ever released from service, THEN they can go to college. Provided of course that they aren’t accused of teh gay in the meantime.
http://www.huffingtonpost.com/rj-eskow/sallie-maes-jets-bank-shi_b_490521.html
Hey, if the Sallie Mae execs fly their fancy jets to DC, will the press attack them for it like they went after Evil Gummint-Owned GM?
Kent Conrad probably wants a chunk of that.
Carper is the Banker-owned Senator from Delaware.
I have called almost all members of the Senate HELP Committee – and now their staffers respond that they support Student Loan Reform – BUT – they are Only Concentrating on Health Care right now.
How useless of Senators that only can handle one thing at a time.
Thanks FDL for supporting Student Loan Reform.
Jane:
Can’t you change this post? Carper is from DE not MD.
Nine times out of ten if you follow the money you get your answer.
Fixed, thank you!
What/who will stop the selfishness and greed?
What is it with the Senate, what will it take to get this huge impediment to progress out of hte way.
The simple outline with this student loan problem is that the government is channeling public money to banks for them to lend to students at a profit. This practice is on its face a misallocation of public funds and can be shown to be by simply calculating the amount of profit banks make by this arrangement. That amount of bank profit is exactly how much money can be saved by the treasury if this divestiture of public money to banks were to stop. No other calcualtion is necessary or relevant.
Claims by Conrad that the measure can’t go through reconciliation along with the HCR bill is completely irrelevant although practically not a bad thought because the HCR measure looks to be headed for failure. But the student loan bank profit making issue can be pasedd through reconciliation next week or the week after that or through reconciliation today separately from the reconciliation of HCR. there is absolutely no reason for avoiding doing this.
Claims about budgetary rules under reconciliation, or puting off resolving this issue for one year are just excuses by the Senate in order to keep banks making profits with the public’s money at the expense of our children seeking an education.
So taxpayers in essence pay twice for their kid’s education. Once by paying taxes to the treasury and again by having those taxes wasted on bank profits which are reflected on the amount parents and their kids have to pay banks for their kid’s student loans.
What is the rationale given by Senators for continuing this scam? That it leads to job creation somewhere? Am I understanding this rationale? The fact is that there is absolutely no reason to continue this giveaway of taxpayer’s money to banks. The very same fucking banks that are already up to their necks in the public’s money that the Obama led assholes provided them to get them out of the hoc the banks put themselves into again using the public’s money.
There is just no fucking end to this. This Senate is just one enormous bag of shit and a way has to be found to be rid of it. Simply just stop electing Senators. The House seemingly has no problem with legislating, it should be the one and only entity to legislate. The Senate demonstrably serves no purpose other than to waste the public’s money. Legislation from the House should go the President for enactment bypassing the Senate cpmpletely.
Education is now a business. Being a business it has to make money. Period. They don’t give two shits if people get educated. Educated for what? You don’t need college to ask “would you like fries with that”…
My wife is a community college student so this issue is close to home for us. It’s the work the people like you and the other Firepups are doing that’s going to bring this issue to light and hopefully force the hands of your hideous Congresscritters. Thanks, Jane.
“A recent Zogby poll found that nearly one in ten Americans had moved at least some of their business to small banks or credit unions.” The “Big Banks Want You Back“, the sovereign wealth funds of the Middle East and China want you back and, apparently, the Congress wants to give you back as well but you know what to do!!
The Chinese sovereign fund is *really* serious about getting your money back and more than willing to pressure America’s mayors to do so:
“The Chinese delegation which met Leonard and Mayor Sam Adams asked that the city to rescind the proclamation, order a new proclamation in support of China, and deny Tibetans a planned celebration at City Hall on Wednesday. Leonard said no to all three requests; adding he expected the mayor to do the same.
Roy Kaufmann, spokesman for Mayor Sam Adams, said the mayor also declined the requests from Chinese government, despite the importance of trade relations between Portland and China, reported The Oregonian. As for stopping Wednesday’s celebration, Kaufmann said, “This is a publicly owned building.”