Answer: Nothing … It’s a stretch to lump student loans and healthcare except that the apparent (i.e. unproven, unsubstantiated) savings accruing from nationalizing of student loan programs are needed to make ObamaCare look like it reduces the deficit.
I think there are huge implications — not only to banks, but also to student borrowers.
Here’s a twist: under ObamaCare, the tax-fines are going to be policed by 15,000 additional IRS agents.
Do you think they’ll add another 15,000 to work collections on student loans ?
I’m betting the over on that one …
* * * * *
Excerpted from USA Today: Revamped student loan bill tucked into massive health bill, Mar 19, 2010
To satisfy budget requirements and win over skeptical deficit hawks in their own party, Democratic leaders wound up directing a total of $19 billion (of the $61 billion in revenues that the student loan shift would produce over 10 years) to reduce the deficit and help pay for the health care portion of the legislation.
The basic thrust of the legislation, which would derive its $61 billion in savings by shifting all lending from the lender-based (but government-subsidized) Federal Family Education Loan Program to the government’s Direct Loan Program. The lenders have been trying to months to turn lawmakers against the idea of ending their ability to make loans (and the accompanying subsidies), arguing that doing so would kill thousands of jobs.
But on Thursday, they took another approach, directing their ire at the billions of dollars that would go to purposes other than helping students afford college, namely health care.
“Should students be paying for their neighbor’s medical costs? Separate consideration of student loan reform is imperative to ensure that legislation that minimizes job losses and reinvests savings in higher education can be considered.”
The most blatantly political move in the legislation: an exemption that would allow a state-run bank in North Dakota (alone among the states) to continue to offer loans directly to students.
Democratic Congressional aides defended the decision because they said the North Dakota bank is, as a taxpayer-owned agency, essentially a government lender like the federal government, so sustaining its ability to lend is consistent, they argued, with the legislation’s overall goal.
But critics compared the deal to the much-criticized exemption that health care supporters granted to Sen. Ben Nelson of Nebraska to win his key vote for that legislation,
“This ‘Bismarck Bank Job’ provision looks like exactly the sort of backroom deal that makes the American people hate Washington and the whole process that has led to this massive, awful government takeover of our health care.”
Full article:
http://www.usatoday.com/news/education/2010-03-19-IHE-student-loan-measures-in-health-bill19_ST_N.htm
The Homa Files 
Leave a comment