Sallie Mae Spends Millions to Prevent Pell Grant Increase

This week I again referenced the hope that the DCCC has to ensure young voters vote for democratic candidates this November. It seems members of Congress want to get reelected, want young voters to vote for them, but members of the US Senate evidently have little interest in casting votes that help young people.

The White House's plan would help students who too often face high interest rates, miserable expectations to repay, and in the end students can end up paying for school three times over. But according to the New York Times bankers say a giant government takeover is afoot

"that could put thousands of people out of work at private lending centers around the country at a time when unemployment is hovering around 10 percent."

So the banks are throwing down. The Times reports that Sallie Mae, the giant student loan lender, has spent $8 million in lobbying the US Senate to prevent the White House's call to overhaul the student loan industry. This is more than double what they spent last year.

"House and Senate aides say that the administration’s plan faces a far tougher fight than it did last fall, when the House passed its version. The fierce attacks from the lending industry, the Massachusetts election that cost the Democrats their filibuster-proof majority in the Senate and the fight over a health care bill have all damaged the chances for the student loan measure . . .

...Political action committees for the lenders and company employees made $2.1 million in political contributions last year, with the money split evenly among Democrat and Republican candidates, the data showed. Sallie Mae’s PAC alone made $194,000 in donations.

Some 10 million students got loans last year to help pay for their educations, and there is disagreement about whether having the federal government take over virtually the entire lending program would help or hurt them. Private lenders warn that students may default on their loans more often because they will get less counseling; the Obama administration says students will benefit from more grants and expanded educational programs. . . "

Less counseling? Seriously? This is their concern? The banking industry just worries about young people, and really wants to make sure they're being taken care of. Yeah, right...

"I would think that the White House would prefer not to make senators vote for something that is going to be very unpopular in their states — and for good reason,” said Jamie Gorelick, a former Clinton administration official who is now lobbying for the lending industry."

Somehow, I think having Senators going back to their districts and explaining to their constituents that they chose their state's young people and their future over the multi-billion dollar student loan industry is more of a win for them. But it wouldn't surprise me if this were to pass Sallie Mae then turned around to spend millions on ads saying they voted against the banker's jobs. Gotta love the Washington BS game.

Email your Senators today and demand they vote in the interest of our nation's youth and not the bankers.

Interestingly enough this story appears the same day The Hill posts a piece reporting that funding for higher education is really good for job creation.

It says, among other things that community colleges specifically can help train youth in some of the most sought after fields such as health care and credentials in engineering which can yield good starting salaries and great futures.

A new report, "Graduated Success: Sustainable Economic Opportunity Through One- and Two-Year Credentials" says

"forty-three percent of those who hold a certificate as their highest degree earn a median annual salary that is higher than that earned by someone holding an associates degree. And twenty-seven percent of those holding a community college certificate as their highest degree earn a median annual salary that is higher than someone holding a bachelors degree. Nearly a third (31 percent) of associates degree holders earn more than someone holding a bachelors degree. . .

. . .The salaries earned by those with community college certificates in engineering and health care ($47,000 and $46,000 respectively), are close to what bachelors degree holders in the social or natural sciences earn, and are actually more than what someone holding a bachelors degree in education earns."

So while the banking industry would have voters believe supporting youth is a crushing blow to the job industry, in reality we're helping more students than NOT helping them.