Critics Slam Bank Lobby for Stalling Student Loan Reform

Pundits say this is actually a one-sided issue

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Obama's student loan reform initiative has been held up as an example of logical, bipartisan legislation ever since it passed the House in September. So why is it stalled in the Senate? Commentators are pointing to bank lobbyists, singling out one woman in particular: Jamie Gorelick, deputy attorney general under Clinton and current Sallie Mae lobbyist extraordinaire.

  • It's as Simple as Right and Wrong, chides Newsweek's Jonathan Alter. "Most issues have two sides. This one truly only has one. The government can save $80 billion ending the subsidy to Sallie Mae and other lenders," or it can continue using that money to glut banks and lobbyists. "The final villains of the tale are the almost comically hypocritical Republicans and conservative Democrats who apparently have no interest in saving the taxpayers $80 billion. They're keeping a low profile and not committing to opposition to direct lending until they've fully lined their pockets with the campaign contributions of the lobbyists."
  • Sallie Mae Is Indefensible, argues Richard Eskow at Huffington Post: "So a corporation created by the government, that earns its billions through guaranteed government loans, was turned into a so-called 'private enterprise' without any of the risks usually associated with that term. Now it's using our money to influence our leaders to act against our interests--while at the same time running tea-party-like scare sessions. Sallie Mae became a zero-risk, get-rich-quick venture for its executives. Then it turned rogue, leading the effort to shortchange the very students it was designed to serve."
  • Middleman Lenders Like Sallie Mae Are 'Senseless,' Pat Garofalo chimes in at Wonk Room. "It's really inexcusable to leave these subsidies in place with the current economic climate. Not only is student debt at an all-time high--with the average debt $23,200 per student--but given that long-term deficits need to be brought under control, it's really senseless to continue giving student lenders subsidies to act as middlemen in the student loan process."
  • ...But Superstar Lobbyists May Let Lenders Win, FireDogLake's Jane Hamsher points out, zeroing in on a woman named Jamie Gorelick: "Gorelick worked in the Clinton White House as a Deputy Attorney General. Like Rahm Emanuel, she had no experience that should have landed her on the board of a mortgage lending giant like Fannie Mae. Despite that, she became a Presidential appointee to Fannie Mae in 1997, only to leave in 2003--after collecting $26.4 million for her troubles." Gorelick has since been hired by Fannie's sister Sallie to kill student lending reform, a mission Hamsher fears she is all too close to completing.
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