Washington, D.C. —
Senator John Thune today commented on the Obama administration’s and Congressional Democrats’ plan to use reconciliation to end the private sector role in providing student loans as a way to pay for the out of control spending associated with their unpopular health care reform bill. Under the plan, the government will borrow money and re-lend it to students at an increased interest rate, rather than allowing banks to lend to students with private capital. A portion of the government’s profit margin paid by indebted college students will be used to offset the cost of the current health care bill.
“South Dakota has the highest proportion of students graduating from college with debt of any state in the nation,” said Thune. “Rather than using this money to reduce the cost of borrowing for South Dakota students, they are using $9 billion to pay for new government spending.”
The health care reconciliation bill is expected to end the popular Federal Family Education Loan program, which would put 35,000 private student lending jobs at risk nationwide, including an estimated 1,200 in South Dakota. Ending the program would also make student lending almost exclusively a service provided by the federal government. While the House passed similar legislation in September of 2009, the Senate has not acted on this proposal that is now being forced through Congress.
“South Dakota has the highest proportion of students graduating from college with debt of any state in the nation,” said Thune. “Rather than using this money to reduce the cost of borrowing for South Dakota students, they are using $9 billion to pay for new government spending.”
The health care reconciliation bill is expected to end the popular Federal Family Education Loan program, which would put 35,000 private student lending jobs at risk nationwide, including an estimated 1,200 in South Dakota. Ending the program would also make student lending almost exclusively a service provided by the federal government. While the House passed similar legislation in September of 2009, the Senate has not acted on this proposal that is now being forced through Congress.