Student Loan Bill Opposed by Group Packed With Ex-Clinton Aides
By DAVID M. HERSZENHORN“This wasteful spending was first identified by President Bill Clinton,” Representative George Miller, Democrat of California and chairman of the Education and Labor Committee, declared on Thursday at a news conference in the Capitol.
Mr. Miller was explaining why he believed there was an urgent need for anoverhaul of federal financial programs that have long enriched private, for-profit student lending companies.
The government pays the private banks a fee to make risk-free loans using taxpayer money. The loans – already guaranteed by the federal government – are then sold back to the government. President Obama has put forward a proposal to end the program, and to instead rely on the existing government direct lending program that accomplishes the same but eliminates the profit for the middlemen. The savings would be used to increase Pell grant scholarships for low-income students.
But just a few minutes after Representative Miller had invoked Mr. Clinton’s name, the Glover Park Group, a powerhouse consulting firm founded by a cadre of former Clinton aides, was aggressively at work fighting the president’s proposal on behalf of an unnamed client.
The firm quickly attacked the effort by Mr. Miller and Senator Tom Harkin, the Democrat from Iowa and chairman of the Health, Education, Labor and Pensions Committee, to include the financial aid legislation in an expedited budget package along with final revisions to the Democrats’ big health care legislation.