WASHINGTON, D.C. – News reports this afternoon indicate that Senate leaders are leaning toward including student loan reforms along with health insurance reform as part of one reconciliation package – a move that would allow Congress to take an up or down vote on legislation that would invest tens of billions of dollars in students instead of banks, without costing taxpayers a dime.
U.S. Rep. George Miller (D-CA), the chairman of the House education committee and the author of the student loan reform bill that passed in the House in September, today said he was encouraged by today’s development and that this decision, if finalized, would boost overall support for passing health insurance reform:
“I am encouraged by indications this afternoon that the Senate appears to agree with us that we should join the health and student loan reform bills in one reconciliation package. Supporting students and their families rather than banks is a win-win for our country, is a much better use of taxpayer dollars, and is helpful to passing the overall health reform bill.
“Sen. Harkin and I and many of our colleagues have been making the case that joining these two bills presents a remarkable opportunity for our country. I am encouraged by reports today and I look forward to a final decision on this matter.
“Congress has a history of enacting student loan reforms through the reconciliation process, under both Democratic and Republican Congresses. Presidents Bill Clinton and George W. Bush recommended reducing the wasteful subsidies that banks get paid at the expense of students and taxpayers and President Obama made it a priority at the outset of his administration.
“We must not waste this opportunity to fix America’s broken health insurance system and make college much more affordable, at no cost to taxpayers.”
Miller held a press conference with Harkin and other lawmakers earlier today; to watch clips click here.
BACKGROUND
At his press conference earlier today, Miller cleared up several key points of confusion surrounding the student loan reform bill:
• First, any student loan bill that would be included under reconciliation would have to be deficit neutral and return $1 billion in savings to pay down the deficit. Contrary to media reports that the bill could increase the deficit, any investments included under the bill would be entirely paid for.
• Second, the legislation will preserve jobs. For months banks have claimed that switching to Direct Loans would eliminate jobs. They are wrong. The student aid bill would maintain a servicing role for lenders, which will preserve jobs and, unlike in the current system, keep banks from shipping these jobs overseas. Last year, Sallie Mae, one of four private companies that currently services Direct Loans, had to bring 2,000 jobs home from overseas in order to be eligible for the servicing contract.
• Third, it has always been known that student loan reform would move as part of a reconciliation measure. Last year’s House Budget Resolution for Fiscal Year 2010 included instructions for the House Education and Labor Committee to enact student loan reforms that produce $1 billion in savings to help reduce the deficit over the next five years. In order to meet these reconciliation requirements, any student loan reform will have to help reduce the deficit.
• Fourth, these subsidies to lenders have been identified as wasteful by both Democratic and Republican presidents. In addition to President Clinton and President Obama, who both identified these subsidies as wasteful, President George W. Bush’s 2005, 2006 and 2008 budget proposals called for reducing these federal subsidies to private banks.
• Finally, this is the only opportunity to enact these reforms. As the lawmakers said today, student loan reform must move under these reconciliation instructions – or it won’t happen.
More information on student loan reform
“I am encouraged by indications this afternoon that the Senate appears to agree with us that we should join the health and student loan reform bills in one reconciliation package. Supporting students and their families rather than banks is a win-win for our country, is a much better use of taxpayer dollars, and is helpful to passing the overall health reform bill.
“Sen. Harkin and I and many of our colleagues have been making the case that joining these two bills presents a remarkable opportunity for our country. I am encouraged by reports today and I look forward to a final decision on this matter.
“Congress has a history of enacting student loan reforms through the reconciliation process, under both Democratic and Republican Congresses. Presidents Bill Clinton and George W. Bush recommended reducing the wasteful subsidies that banks get paid at the expense of students and taxpayers and President Obama made it a priority at the outset of his administration.
“We must not waste this opportunity to fix America’s broken health insurance system and make college much more affordable, at no cost to taxpayers.”
Miller held a press conference with Harkin and other lawmakers earlier today; to watch clips click here.
BACKGROUND
At his press conference earlier today, Miller cleared up several key points of confusion surrounding the student loan reform bill:
• First, any student loan bill that would be included under reconciliation would have to be deficit neutral and return $1 billion in savings to pay down the deficit. Contrary to media reports that the bill could increase the deficit, any investments included under the bill would be entirely paid for.
• Second, the legislation will preserve jobs. For months banks have claimed that switching to Direct Loans would eliminate jobs. They are wrong. The student aid bill would maintain a servicing role for lenders, which will preserve jobs and, unlike in the current system, keep banks from shipping these jobs overseas. Last year, Sallie Mae, one of four private companies that currently services Direct Loans, had to bring 2,000 jobs home from overseas in order to be eligible for the servicing contract.
• Third, it has always been known that student loan reform would move as part of a reconciliation measure. Last year’s House Budget Resolution for Fiscal Year 2010 included instructions for the House Education and Labor Committee to enact student loan reforms that produce $1 billion in savings to help reduce the deficit over the next five years. In order to meet these reconciliation requirements, any student loan reform will have to help reduce the deficit.
• Fourth, these subsidies to lenders have been identified as wasteful by both Democratic and Republican presidents. In addition to President Clinton and President Obama, who both identified these subsidies as wasteful, President George W. Bush’s 2005, 2006 and 2008 budget proposals called for reducing these federal subsidies to private banks.
• Finally, this is the only opportunity to enact these reforms. As the lawmakers said today, student loan reform must move under these reconciliation instructions – or it won’t happen.
More information on student loan reform
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