Washington, D.C. – Nebraska Democrat Ben Nelson says there isn't much he can do to stop the federal government from increasing its role in the student lending industry. The language has been tied onto the Democrats health care overhaul effort.
Democrats want the federal government to take over direct loans and cut off subsidies for private lenders. Iowa Senator Tom Harkin helped secure the provision in the health care reconciliation package. Harkin says the projected savings will be used to increase scholarship money for low-income kids in Iowa, Nebraska, and other states.
Democrats say reconciliation - which requires 51 votes - is the only way to get the student lending reforms through Congress. Senator Ben Nelson has been speaking out against the provisions. "We have colleges in the area that have said that they still prefer to have private lending wherever they can have it and they are not ready to go to direct loan others already made decision to go to direct loan because they told it was going to pass," Nelson says.
Nelson argues Nebraska will lose private lending business and jobs. He says colleges prefer private lenders because they offer students personal on-campus service and tailored loan packages.