Student Loan Industry's Senate Coalition Splinters in Sign of Victory for Students

The coalition of six Democratic senators who urged Senate Majority Leader Harry Reid to back student loan industry profits two weeks ago has splintered in a strong sign of a coming victory for students.

Two of the original six senators -- Blanche Lincoln and Ben Nelson -- will vote "no" on reconciliation due to their opposition to the student loan measures. But senators Bill Nelson, Tom Carper and Jim Webb have signaled that they will support the bill and stand with American college students.

The student loan industry's lobbying campaign, as detailed in the Campaign for America's Future Money-Changers report [1], consisted of a multimillion-dollar effort to push a group of Democratic senators to keep reform from going through as part of reconciliation.

Their campaign of strategic lobbyist hires and maxed-out contributions appeared to achieve some success two weeks ago, when six senators asked Reid to consider alternative, industry-sponsored reform proposals.

But now, common-sense reforms in the interests of American college students appear to be winning the day. According to The Washington Post [2], a spokesperson for Sen. Nelson confirmed that he would support the reconciliation bill—and that he supports the education legislation in the bill:

"Sen. Nelson likes the education and student loan reforms. He doesn't like the jobs it could cost in north Florida. But at this point, it looks like it's in the health-care and education legislation to stay."

Webb, another member of the group who wrote to Reid, has also signaled to the Associated Press [3] that he will vote yes, against the wishes of the student loan industry:

"I think there are efficiencies in the private sector that you don't have in the government, but it's not going to affect my vote on reconciliation," Webb said.

Carper also appears to have stopped sticking up for the student lenders and their wasteful subsidies:

Carper said he worked with for-profit and nonprofit lenders to find a way for them to continue to be involved servicing and originating loans.

"Our challenge was to come up with an approach where we could generate the kind of budget savings that were generated by the president's proposal," he said. "We simply could not get there."

Sallie Mae, meanwhile, has been reduced to issuing desperate warnings about "thousands" of lost jobs [4]. These concerns are exaggerated [5], writes Pedro de la Torre of the Center for American Progress. The banks, as usual, are more concerned with protecting profits than providing decent jobs.

Two of the original six senators apparently feel the banks' pain. Lincoln and Nelson have decided that they will take a stand for Wall Street and vote no on reconciliation over the inclusion of student loan reform legislation in the health care fix-it bill.

The Money-Changers report sheds light on how these two senators arrived at their decision. Lincoln is extremely close to one student loan industry lobbyist, as I detailed yesterday [6], and has been a top recipient of Sallie Mae cash in recent months.

Nelson also has strong ties to the industry through his former legislative director, Amy Tejral [7]. Tejral lobbies for Nelnet, a major lender based in Nebraska. Nelson is also a top recipient of Nelnet cash. The company's PAC has given him $19,000 over the years, and executives Jay and Mike Dunlap gave him $3,000 late last year.

Sen. Mark Warner does not appear to have taken a public position on the student loan reform piece of reconciliation just yet. It remains to be seen whether his close ties to Sallie Mae lobbyists will win the day, or whether he will stand with Virginia's college students and support strong student loan reforms.

Victory is just around the corner, but nothing is set in stone. Call your senators today to tell them to support student loan reform as part of the reconciliation package! [8]