- The Washington Times - Tuesday, March 30, 2010

President Obama put the finishing touches on his top policy priority Tuesday, signing the package of legislative fixes to the already-passed health care bill, but he immediately shifted the spotlight to an overhaul of the nation’s student loan industry also included in the new law.

The signing ceremony took place at Northern Virginia Community College in Alexandria, where Mr. Obama trumpeted the decision by Democratic leaders to attach to the health care bill a sweeping provision that eliminates federal subsidies to banks for student loans and calls for the federal government to make the loans directly.

Mr. Obama and his Democratic allies say the provision will help students by eliminating an “unnecessary middleman” and reinvesting the savings back into higher-education aid.

“In the 21st century, when the success of every American hinges more than ever on the quality of their education … we can’t afford to waste billions of dollars on giveaways to banks,” Mr. Obama said. “By cutting out the middleman, we’ll save the American taxpayers $68 billion in the coming years.”

TWT RELATED STORY:
Student loan Web site broken on first day of new law

But Republicans, who fiercely opposed the health care package, branded the student loan changes as another government takeover that they argue will hurt students in the long term.

“This latest Washington takeover would deprive 15 million students — who voted with their feet and chose private instead of direct loans last year — of choosing among 2,000 lenders,” said Sen. Lamar Alexander, Tennessee Republican and Senate Republican Conference chairman, earlier this month. “They’ll replace these lenders with the equivalent of four federal call centers, making the process of getting loans about as friendly as going to the Department of Motor Vehicles for a drivers license.”

Under the new law, students who take out loans after July 2014 would have their repayments capped at 10 percent of their discretionary income and would have their balance forgiven after 20 years if they have kept up their payments.

The health care fixes amend the bill he signed last week and put an end to the legislative battle over his marquee priority. The fight is likely to go on, however, as the law faces challenges from a number of states in the courts and Republicans campaign this fall on a platform to repeal it.

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