Why Do Conservatives Hate Students?

Right wing hack Dana Perino is outraged that students will be able to get loans directly without useless middlemen sucking their blood. Students, on the other hand, are celebrating. Corrupt GOP barnacle, Buck McKeon (R-CA), who has financed his political power through bribes by student loan companies, is also freaking out-- and lying his ass off. To McKeon and Perino it's a socialist takeover, a job killer and worse.

The bill replaces a 45 year old student loan program in which private lenders receive a government guarantee of repayment if borrowers default with an expanded and more direct program that doesn't include cuts for private businesses (and a cut of that cut for the political protection rackets set up by crooks like McKeon). McKeon is screaming that the bill will eliminate 30,000 jobs. That's a self-serving lie, one of many:

For the past year, student loan company lobbyists and their allies have spread myths intended to kill common sense student financial aid reform and maintain a system of taxpayer handouts at the expense of students and families...
Myth 1: The reconciliation bill taxes students to pay for health care.

Fact: The bill will indeed take $9.1 billion of the $61 billion in savings from ending wasteful government subsidies to banks and use it to pay for health care reform. But for decades the banks have simply been putting these subsidies in their pockets, so it is bizarre and hypocritical for them and their allies to suddenly act like protectors of students. In addition, the funds saved by reforming student loans that is used by health care is more than offset by $13.18 billion in education investments paid for by the health insurance reform section of the reconciliation bill.

Myth 2: Passage of student loan reform legislation will result in the loss of thousands of loan industry jobs.

Fact: There will be no shortage of work for loan companies under the new reforms; all current loans under the old Federal Family Education Loan Program (FFELP) will still need to be serviced, as will all new loans made under the Direct Loan Program (DLP), and the same big lenders have already lined up for contracts to service new loans. In fact, student loan giant Sallie Mae has announced it is in the process of bringing back 3,400 jobs from overseas. These jobs are returning to the U.S., at least in part, so that the company can be eligible for Department of Education contracts to service Direct Loans. In addition, most loan companies today do more than make federal student loans. Many offer consultation services to schools, private student loans, collections services, and other products and services, and will continue to be in business and employing people for these activities after reform is passed.

Companies like Sallie Mae seem to be playing politics with jobs, frequently changing their job loss estimates, and exaggerating the impact that the legislation will have on their workforce. Opponents of reform have claimed that 30,000 to 35,000 private sector jobs would be lost, but this is a very rough estimate of the total number of jobs that are involved in the FFELP program. No one seriously believes that job losses-- even in the worst possible estimation-- would approach this figure.

In addition, the bill’s investments in community colleges and minority-serving institutions, made possible by ending the lender subsidies, will save and create jobs. And by expanding educational opportunity, the reforms will enable more young people to gain the skills and experience necessary to enter the workforce, thereby creating more jobs and strengthening the economy in the long term.

Myth 3: Student loan reform changes mean that students will be charged higher interest rates.

Fact: Interest rates on federal student loans are set by Congress, and the reconciliation bill will not change the interest rates that students are charged. This bill will reduce monthly payments in the Income Based Repayment program, however. Currently, federal student loan payments can be capped at 15% of a borrower’s monthly discretionary income, and loans can be forgiven completely after 25 years. If the reconciliation bill passes, these numbers will be reduced to 10% and 20 years respectively, so it would actually make college loans more affordable for students in the long run.

Myth 4: Student loan reform will eliminate student choice.

Fact: In the current system, students don’t have a true choice; they have the choices their schools provide for them, which, as investigations by the New York Attorney General’s office and others have shown, have sometimes in the past been secured through kickbacks, improper inducements, and other nefarious tactics.

In fact, lenders are offering virtually identical rates on student loans, and neither schools nor students are in a good position to know how different companies will service their loan. Student loans may also be sold off to other companies (a practice the reconciliation bill would end), so schools and students are often not in the position to even know which company will service their loan.

You don’t have to take our word for it: Listen to Don Goldman, a partner with Qorvis Communications, which coordinates a lender-funded campaign against student loan reform called (ironically) Protect Student Choice. In an interview with Campus Progress, he said the campaign is about “making sure schools and universities have their choice of who they want to be getting loans from,” though he admits that, despite the premise of student choice in the campaign, students “are sort of stuck with what the schools decide.”

Trying to make this debate about “choice of lender” is simply part of the lending industry’s orchestrated attempt to make this debate about everything except what it’s actually about: college affordability.

Myth 5: Student loan reform is just another government takeover

Fact: Both the DLP and the FFELP are already government programs, administered by the Department of Education. Congress sets eligibility rules, maximum interest rates, subsidy rates, rules to help prevent conflicts of interest, rules about bankruptcy and default, minimum deferment and forbearance options, and more. You can’t “nationalize” something that’s already directed and secured by the government. What you can do is simplify the system and eliminate fraud and waste so that money saved is going to needy students, not bank CEOs.

As part of his weekly address this morning President Obama put it in context if a renewal of the American Dream.

Year after year, we’ve seen billions of taxpayer dollars handed out as subsidies to the bankers and middlemen who handle federal student loans, when that money should have gone to advancing the dreams of our students and working families. And yet attempts to fix this problem and reform this program were thwarted by special interests that fought tooth and nail to preserve their exclusive giveaway.

But this time, we said, would be different. We said we’d stand up to the special interests, and stand up for the interests of students and families. That’s what happened this week. And I commend all the Senators and Representatives who did the right thing.

This reform of the federal student loan programs will save taxpayers $68 billion over the next decade. And with this legislation, we’re putting that money to use achieving a goal I set for America: by the end of this decade, we will once again have the highest proportion of college graduates in the world.

To make college more affordable for millions of middle-class Americans for whom the cost of higher education has become an unbearable burden, we’re expanding federal Pell Grants for students: increasing them to keep pace with inflation in the coming years and putting the program on a stronger financial footing. In total, we’re doubling funding for the federal Pell Grant program to help the students who depend on it.

To make sure our students don’t go broke just because they chose to go to college, we’re making it easier for graduates to afford their student loan payments. Today, about 2 in 3 graduates take out loans to pay for college. The average student ends up with more than $23,000 in debt. So when this change takes effect in 2014, we’ll cap a graduate’s annual student loan repayments at 10 percent of his or her income.

To help an additional 5 million Americans earn degrees and certificates over the next decade, we’re revitalizing programming at our community colleges-- the career pathways for millions of dislocated workers and working families across this country. These schools are centers of learning; where students young and old can get the skills and technical training they need for the jobs of today and tomorrow. They’re centers of opportunity; where we can forge partnerships between students and businesses so that every community can gain the workforce it needs. And they are vital to our economic future.

And to ensure that all our students have every chance to live up to their full potential, this legislation also increases support for our Minority Serving Institutions, including our Historically Black Colleges and Universities, to keep them as strong as ever in this new century.

I had dinner with my friend Irwing last night. He was jumping for joy when I told him about it because he's transferring to Occidental, a school Obama once went to here in L.A. and this legislation takes a huge burden off him and his parents in excess fees that would have gone to crooked businessmen and their crooked politician pals like Buck McKeon. Every single Republican voted no, as did 32 conservative Democrats, mostly Blue Dog scum like Jason Altmire (PA), John Barrow (GA), Dan Boren (OK), Bobby Bright (AL), Travis Childers (MS), Jim Cooper (TN), Stephanie Herseth Sandlin (SD), Tim Holden (PA), Frank Kratovil (MD), Jim Marshall (GA), Jim Matheson (UT), Charlie Melancon (LA), Walt Minnick (ID), Glenn Nye (VA), Collin Peterson (MN), Mike Ross (AR), Heath Shuler (NC), Zack Space (OH), and Gene Taylor (MS).