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Democrats Start To Sell Student Loan Reform

Jane wrote today about the major progressive victory in student loan reform, taking useless subsidies from banks and putting the money to use making college more affordable. I would gather virtually everyone on the Democratic side can agree on the worthiness of this achievement: the problem is that too few people know about it. That’s beginning to change.

Organizing for America just blasted their supporters with an email taking credit for this victory, explaining it, and encouraging supporters to spread the message. It includes a video from Dr. Jill Biden, a community college teacher herself, explaining what students will get out of this law.

Here’s an excerpt from the email:

In Spring 2007, on a conference call with students, then-Senator Barack Obama called for major reform to federal student loans:

“We shouldn’t be providing billions in taxpayer-funded giveaways to private banks. We should be providing an affordable, accessible college education to every American.” […]

The bill the President signed this morning includes historic investments to make education more affordable, and delivers on a key campaign promise. The legislation:

— Ends subsidies to special-interest private lending companies.

— Doubles funding for Pell Grants to help more students afford a college education.

— Will cap a graduate’s annual student-loan repayments at 10 percent of his or her income.

— Helps an additional 5 million Americans earn degrees and certificates over the next decade, by revitalizing programming at our nation’s community colleges.

It’s a tremendous achievement, but the news may get lost in the excitement around the passage of comprehensive health care reform. So we need to make sure that when folks in XXX open the local paper to the letters page this week, they’ll see notes from their neighbors supporting these important reforms.

OfA has a landing page for people to write letters to the editor about student loan reform in their local paper.

In a separate email, Sen. Al Franken just touted the student loan acccomplishment:

Today Franni and I were honored to be there in person to watch the President sign sweeping federal student aid reform into law. We just cut out the big bank middlemen for federal student loans. Now aid to help kids afford college will come directly from the government.

This is a very, very good thing for students across the country. For the past 40 years under the old system, the federal government paid banks massive subsidies to get them to lend to students. On top of that, the government guaranteed the loans — so there was no risk for banks, just loads of taxpayer-subsidized profits.

This was corporate welfare masquerading as private enterprise, and we just put a stop to it. For Minnesota students who already have direct lending from the U of M, we shored up Pell Grants for those at risk of having them cut by as much as 60%, or of losing them altogether.

It’s just smart politics to highlight the student loan reforms. They put those who voted against them (I’m looking at you, Republican Party and Blanche Lincoln) in an impossible position, defending big bank subsidies. And they show follow-through on a major Democratic agenda item, which helps students and their families, among the most highly-sought voters in the next election. This is the type of change in the law that will have positive effects for voter intensity in the midterms.

(And I’m not just saying that to balance out my viewpoints on Arne Duncan, who pushed very strongly for this law.)

The only trouble with passing student loan reform in conjunction with the health care law is that the former would get lost in the shuffle. Democrats are at least trying to prevent that from happening.

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David Dayen

David Dayen

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