The student loan reform

As Jonathan Chait pointed out yesterday:

If health care reform weren't such an enormous deal, people would be paying more attention to the sweeping student loan reform that's being attached to it and could pass on the same vote.

This is a straightforward and unquestionably sensible reform, which can easily save billions of dollars currently being wasted for no good reason and make them available to help students go to college, but it has has nevertheless been steadily blocked for more than a decade and a half by a coalition of Republicans, bankers and other special interests, and some Congressional Democrats beholden to them. Now it looks as though this reform might actually pass, since a reconciliation vote--requiring only a majority of Senators-- means it can't be killed by filibuster.

Chait is right that this story has been been developing largely under the radar, and most people seem to be unaware of it, so it's worth reading his explanation of what this is all about: "The Other Huge Reform At Stake Sunday"

For a compact introduction or, if you prefer, a condensed version, Ezra Klein has boiled this down to two clear and concise paragraphs:

Attached to the health-care reconciliation bill is a major reform of the student loan program. The easy way to explain this is that the current student loan program is both about education loans and corporate welfare. To keep rates down, the government guarantees these loans, which means that lenders get paid back even if the students default. Which means that the lenders aren't really serving any purpose.

Cutting them out will save taxpayers more than $60 billion over the next 10 years, with most of that money slated to go to Pell grants. Past attempts to reform this program have been blocked by a mixture of Republicans and Democrats with big lender companies in their states. But as Jon Chait says, "the fact that this is a straight majority vote means the usual coalition of every Republican plus a couple Democratic shills won't be enough to stop it. This would be a major advance for the cause of good government reform."

As Chait also says, the fact that this reform has been attached to the budget reconciliation resolution means that "a big vote has gotten even bigger". It's white-knuckle time now.

--Jeff Weintraub