I will dive into the details of the bill once it is available. Until then here is how the media is reporting it:
- In addition to the vote count supporting the bill, Bloomberg noted that a Republican proposal to keep private lenders originating loans in the program went down to defeat: "Lawmakers earlier rejected, 265-165, an
alternative plan by House Republicans that would have let
private lenders continue marketing federal student loans."
- They also provided this sound bite from Pres. Obama about the plan: "“This plan would end the billions upon billions of dollars in unwarranted subsidies that we hand out to banks and financial institutions,” Obama said before the vote, during a speech to students at the University of Maryland. “Instead, we’re going to use that money to guarantee access to low-cost loans, no matter what the economy looks like."
- Rep. John Kline noted his concerns, "calling Obama’s plan a “rush to a government takeover” of the student-loan business."
- The Wall Street Journal had this to say about the prospects in the Senate: "In the Senate, staff on the Health Education Labor and Pensions Committee are drafting legislation similar to the House version, according to a Senate Democratic aide. The Senate bill also would end private-lender origination of loans, the aide said, leaving the federal government as the sole provider of college loans."
- The article also addressed concerns about the transition to shift 4,000 schools to DL: "Passage of the legislation would require the Department of Education to accommodate around 4,000 schools by next July 1. And those schools would have to have their processing systems prepared well before that since most financial aid packages are typically distributed in the spring. Lending experts at some of the largest schools in the country, such as the University of Notre Dame, have said that they won't have sufficient time to make the transition to a government-run lending program. Having lined up additional contractors to handle the anticipated increase in direct-loan volume, federal officials say they are prepared. Absent an unanticipated breakdown in the system, industry observers say borrowers are unlikely to notice the shift.
- Here is statement from Paul Kanjorski, one of four Democrats to vote against the bill. Here is an excerpt of his statement:
"Additionally, in April, I joined Sallie Mae CEO AL Lord to announce
the return of 600 jobs from overseas to Sallie Mae's lending facility
in Hanover Industrial Park, almost doubling the number of employees at
Sallie Mae in the region, and I will continue to work to enhance
employment in the area. If this legislation is enacted, Sallie Mae
would no longer originate loans which would greatly impact the company,
and could cause the loss of jobs. Since I joined Congress, I have
worked first and foremost to create jobs in Northeastern Pennsylvania.
Especially in these difficult economic times, we must work to ensure
that the jobs we have stay in the area and that more jobs are created.
"I agree with the intent of H.R. 3221 to allow as many students as possible to go to college, while also investing in community colleges, but I do not believe that this bill was the correct method to accomplish these goals."
- The Washington Post provided commentary from one of the six Republicans who voted for the bill:
"For Rep. Tom Petri (Wis.), one of the Republican mavericks, the vote
was a milestone. He has advocated direct lending since 1983, a lonely
position in his party. "After years of explaining my approach," Petri said, "and years of
defending direct loans from misleading attacks by the private student
loan industry, we are an important step closer to settling the debate."
- The Associated Press questioned the ability of this bill to contain college costs and noted the controversy over CBO scores:
"And while the measure would increase Pell Grants, it would do
nothing to curb college costs, which rise much faster than Pell Grants
do. In addition, the CBO says that when administrative costs and
market conditions are considered, the savings from switching to direct
government lending could be much lower, $47 billion instead of $87
billion."
- Here is how Inside Higher Ed handicapped the situation in the Senate:
"With House passage, attention turns to the typically more bipartisan
Senate, where supporters of the guaranteed loan program believe they
have a better shot of some compromise that gives them a meaningful role
in student lending going forward (they are hopeful that Sen. Ben
Nelson, the Democrat from Nebraska, which is home to the major lender
Nelnet, will fight for them to save jobs in his state).
Lenders won't be the only ones looking for help from the Senate; supporters of private colleges, many of which are unhappy about some of the administration's proposals (including the dependence on states to distribute much of the college access and community college money, and the proposed changes in the Perkins Loan Program) are also hoping they'll get an airing in Congress's senior chamber."
- The Burlington Free Press emphasized an amendment to the bill that would help non-profits and guarantors:
"The bill, called the Student Aid and Fiscal Responsibility Act,
contains an amendment co-sponsored by Rep. Peter Welch (D.-Vt.) that
would permit nonprofit agencies and state guarantors such as VSAC to
continue offering college and career placement counseling, in addition
to loan servicing and advising. VSAC would do so as a contractor of the
U.S. Department of Education. The bill shifts all federal lending to a
direct loan program administered through the department."
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