With Partisan Vote, House Passes Student Loan Reform
House lawmakers on Thursday easily passed legislation to eliminate billions of dollars in federal subsidies to private insurers offering low-rate student loans. The proposal basically cuts out the private companies as middle-men between students and the federal government, which not only subsidizes the loans currently, but also protects the private lenders against default.
The count was 253 to 171, with six Republicans voting for the measure and four Democrats voting against.
Sponsors of the bill say it will save $90 billion over the next decade — money that would be pumped back into the realm of student-aid by funding Pell grants and keeping rates low.
Speaking at a health reform rally at the University of Maryland earlier in the day, President Obama said the bill will eliminate “unwarranted subsidies” to the insurance industry, “money that doesn’t do anything to make your loans any cheaper.”
It’s unclear when the Senate will consider the proposal.