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The crony capitalists who make billions acting as middle-men for federal student loans aren't happy that the president wants to cut their unnecessary subsidy, and they're making their concerns known:
“The administration has decided that it wants to capture the profits of federal student loans,” said Kevin Bruns, executive director of America’s Student Loan Providers, a trade group that is fighting Mr. Obama’s plan.My goodness. Capture the profits, eh? Sounds like dread socialism. Except that those profits are taxpayer dollars that are given to these corporations in exchange for, well, nothing the government couldn't do more efficiently on its own. If you've been following the rapidly evolving dynamics of American capitalism recently, you're probably prepared for the next paragraph:
Just last week, Sallie Mae reported that despite losing $213 million in 2008, it paid its chief executive more than $4.6 million in cash and stock and its vice chairman more than $13.2 million in cash and stock, including the use of a company plane. The company, which did not receive money under the $700 billion financial system bailout and is not subject to pay restrictions, also disbursed cash bonuses of up to $600,000 to other executives.This is a great chance for Americans to choose directly between paying huge bonuses to financiers or saving taxpayer dollars, all while helping more students go to college. This fight is also an opportunity to demonstrate the president's bipartisan side, though, since there are both Democrats and Republicans arguing for the lenders interests, and, as I learned reporting on this issue years ago, a senior Republican on the House Education Committee, Representative Tom Petri, has been an advocate for eliminating this subsidy for a while. He's also one of the Republican legislators whose district President Obama won last fall, so there's an added incentive for him to help the chief executive save everybody some money. Representative Howard McKeon, the ranking member of the Education Committee, has been a strident opponent of student loan reform for years, as has House Minority Leader John Boehner. Both, incidentally, have taken hundreds of thousands of dollars in donations from student lenders.
-- Tim Fernholz
