Subsidies for big banks or for students: will the Senate blow this? [View All]

[JohnWxy]

http://www.ourfuture.org/blog-entry/2010020505/subsidies-big-banks-or-college-kids-will-senate-blow

The president rightly calls it a "no brainer." Direct lending to college students that saves $90 billion in excess subsidies to big banks and uses it to pay for college grants for poor kids and tax breaks for working families to help pay for tuition. This isn't complicated. The House passed it overwhelmingly last year.

But according to the New York Times -- http://is.gd/7Kuix -- it may be in trouble in the Senate. The banks, bailed out by taxpayers, are spending millions on big-time Democratic lobbyists to kill the reform.

Let's be clear on the choice. The government now wastes $90 billion in a true scam: subsidizing big banks to make loans to college students THAT THE GOVERNMENT GUARANTEES ANYWAY. The banks make out like bandits. They were exposed bribing college loan programs to give them monopoly position. Then they gouge students, rivalling credit card companies for imposing hidden fees and harsh penalties for late payments. They make tons on collections from students who have lost their jobs, even after the government pays off the loan. And, when the finanical crisis hit, the banks abandoned the program, forcing the government to step in to insure that millions of students would not have to drop out of school.

Alternatively the government could continue direct lending, and that $90 billion over ten years could go to Pell Grants for poor kids, tax credits for working families to help pay college costs. This is not a hard choice.

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