Loans R U.S.

Sep 17, 2009 1:54pm

ABC News' Rachel Martin and Mary Bruce report:

Struggling to come up with the cash for college? The Obama administration wants to cut out the middle man from federal student loan programs and give students the chance to borrow directly from the federal government, specifically the US Treasury.  That’s the thrust of a bill expected to pass on the House floor today.  Supporters of the bill say it would save about $87 billion over ten years and increase students' access to low interest loans and grants. But conservative critics say the bill is further evidence that the Obama administration is ushering in an unprecedented level of big government.

“We need competition in the  private sector. We don't need to take over this sector like what we did with  the automobile industry. Socialism doesn't work. government control doesn't work,” Rep. Dan Burton, R-Ind., said.

But it’s worth pointing out that students are facing more and more challenges in this economic climate, trying to secure loans they can afford. And the existing private-lender school loan system is not without its critics.

The President addressed the bill today during a health care rally in College Park, Maryland. He said the bill would help simplify financial aid forms and make more money available to more students.  “Because you voted for change in November, we’re going to bring change in the House of Representatives today. And then we will take this battle for American schools and America’s working families to the Senate and then I intend to sign his bill into law. Because that’s the change you voted for. That’s the change we’re going to deliver. “

House Speaker Nancy Pelosi spoke out in support of the bill earlier in the week. “Expanding access to higher education is essential to building America's way out of the recession and keeping our nation competitive,” Pelosi said. The Speaker claimed the bill “means that many more students will enter college; that they will graduate with less debt; that the federal loan initiatives that they and their families depend upon are strengthened for decades to come; and that taxpayers will save money."

Administration officials say this bill is a major part of the President’s overall education agenda. But they are prepared for pushback from those in the GOP say this is an unprecedented intrusion of government into the lives of Americans. Here’s how Rep. John Kline, the Senior Republican on the House Education Committee put it: 

“The vote we’ll take on student lending is the culmination of a plan set in motion more than a decade and a half ago – and one that bears an eerily strong resemblance to the health care debate that rages on today.” He added “I urge my colleagues to slow down, take a breath, and ask yourself whether another government takeover is what we need right now. I think the answer is a clear no.”

-Rachel Martin and Mary Bruce

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus