WASHINGTON, D.C. – Including student loan reforms in a reconciliation package will help pass health insurance reform in Congress because it is a once-in-a generation opportunity to make historic investments in college students and families, instead of banks – and at no cost to taxpayers, said U.S. Rep. George Miller (D-CA), the chairman of the House education committee, at a press conference on Capitol Hill today.
Miller was joined by U.S. Senator Tom Harkin (D-IA), the chair of the Senate education committee, House Majority Whip James E. Clyburn (D-SC) and Democratic Caucus Vice Chairman Xavier Becerra (D-CA), who underscored the importance of the bill for the Congressional Black Caucus and the Congressional Hispanic Caucus, because it invests billions of dollars to help low-income and minority students pay for college and graduate.
“Senators have a clear choice here: they can either continue to send tens of billions of dollars in wasteful subsidies to banks – or they can start to invest that money directly in students,” said Miller, who is the author of the student aid bill in the House. “This choice speaks to what our priorities will be for the next generation. We have a once-in-a-lifetime opportunity to change Washington and do the right thing, the fair thing, and the fiscally responsible thing for hard-working families. This is very important to the members of the House Democratic Caucus.”
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Miller was joined by U.S. Senator Tom Harkin (D-IA), the chair of the Senate education committee, House Majority Whip James E. Clyburn (D-SC) and Democratic Caucus Vice Chairman Xavier Becerra (D-CA), who underscored the importance of the bill for the Congressional Black Caucus and the Congressional Hispanic Caucus, because it invests billions of dollars to help low-income and minority students pay for college and graduate.
“Senators have a clear choice here: they can either continue to send tens of billions of dollars in wasteful subsidies to banks – or they can start to invest that money directly in students,” said Miller, who is the author of the student aid bill in the House. “This choice speaks to what our priorities will be for the next generation. We have a once-in-a-lifetime opportunity to change Washington and do the right thing, the fair thing, and the fiscally responsible thing for hard-working families. This is very important to the members of the House Democratic Caucus.”
Created with flickrSLiDR.
The 2009 budget resolution provided reconciliation instructions for Congress to use for both health insurance reform and student loan reform. To comply with the reconciliation instructions, the student loan reforms have to be budget neutral and reduce the deficit by $1 billion over five years. Budget rules require that both bills would move together as one reconciliation measure – they cannot be moved separately.
The House passed the legislation, the Student Aid and Fiscal Responsibility Act, in September with bipartisan support. The bill, which was first proposed by President Obama, would eliminate wasteful taxpayer subsidies to banks in the federal student loan programs and invest the savings in students, families and taxpayers. The reliable and cost-efficient federal Direct Loan program, which many schools already use, would provide students with the same loans as banks – but at a cheaper price for taxpayers.
At the press conference today, Miller cleared up several key points of confusion:
To read Miller’s remarks at today’s press conference, click here.
To watch the question and answer portion of the press conference, click here.
More information on the Student Aid and Fiscal Responsibility Act.
The House passed the legislation, the Student Aid and Fiscal Responsibility Act, in September with bipartisan support. The bill, which was first proposed by President Obama, would eliminate wasteful taxpayer subsidies to banks in the federal student loan programs and invest the savings in students, families and taxpayers. The reliable and cost-efficient federal Direct Loan program, which many schools already use, would provide students with the same loans as banks – but at a cheaper price for taxpayers.
At the press conference today, Miller cleared up several key points of confusion:
- 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 outsourced jobs back to the U.S. 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 Bill Clinton and President Barack 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.
To read Miller’s remarks at today’s press conference, click here.
To watch the question and answer portion of the press conference, click here.
More information on the Student Aid and Fiscal Responsibility Act.
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