March 12, 2010

Health care and financial-aid reform as a package

Wednesday's rumor has turned into Friday's semi-confirmation: Democratic leaders in Congress are looking very seriously at packaging together the changes to the Senate health-care bill with the Student Aid and Financial Responsibility Act (SAFRA) through budget reconciliation. SAFRA would end federal subsidies for bankers that initiate loans for college students and return an estimated $67 billion over many years to be used for better purposes, such as giving poor students Pell grants. Since taxpayers foot the bill for the banker subsidies that currently exist, students end up paying twice for their own loans, once in interest to servicers and a second time in taxes that go to banker subsidies. It's time to end the double taxation of students.

Politically, the packaging is a good move for multiple reasons. Matthew Yglesias argues that putting SAFRA in with the health-care bill changes will reassure House progressives that one of their priorities will get a vote in the Senate, and it might get SAFRA over the hump of the small number of Senate Democratic naysayers who are siding with lenders over students. Last night, Sara Goldrick-Rab explained the shame of the anti-student bank subsidies, and it sort of burns me that one of the Democrats signing the protect-the-poor-bankers letter to Harry Reid is Florida's Bill Nelson. 

To be honest, I expect the package is more likely to attract support from the Nebraska Senator Nelson than Florida's Senator Nelson, because Ben Nelson (NE) now wants his embarrassing Cornhusker Deal for health-care off the table. But both Senator Nelsons are on the wrong side of the issue with SAFRA. I e-mailed Bill Nelson to that effect early this morning, but each time I've called his Washington office today, it's been busy and the voicemail is full. Time to call his local office on Monday...

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Posted in Education policy on March 12, 2010 9:39 PM |