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Tuesday, September 22, 2009

Obama Dings Bailed-out Banks for Balking at Student Loan Reform

President Obama criticizes the special-interest opposition to his plan to reform student loans and strengthen Pell grants (HR 3221, which passed the House last week):

Mr. Obama, speaking at a community college, said that American banks had received bailout money from the federal government, and yet were still fighting against a proposal that would eliminate an unwarranted subsidy which the banks receive for providing student loans.

“Ending this unwarranted subsidy for big banks is a no-brainer for folks everywhere,” Mr. Obama said, before lashing out against his favorite target of late. “Everywhere except Washington, that is. In fact, we’re already seeing the special interests rallying to save this giveaway” [Helene Cooper, "Obama Criticizes Banks over Student Loan Subsidies," New York Times: The Caucus, 2009.09.21].

So let's rewind the tape: why did Congresswomen Herseth Sandlin say she voted against HR 3221?

The enactment of this bill in this form could result in the loss of hundreds if not thousands of jobs in South Dakota during a period of higher unemployment," she told reporters Thursday, mentioning Student Loan Corp. in Sioux Falls, a subsidiary of Citi [Ledyard King, "Student Loan Reform Could Cost S. Dakota," that Sioux Falls paper, 2009.09.18].

SHS is fighting for a continued government subsidy to Citi, which we bailed out with $50 billion, the most given yet to any one bank. Senator Thune says he's all about ending the bailouts (which he voted for)... yet he supports continuing the student loan subsidy as well.

Please tell me at least Senator Tim Johnson will agree with the President that ending this subsidy and making college more affordable for more Americans during a recession is indeed a no-brainer.

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