Student-loan takeover slips through with health care law
It passed with little fanfare in the slipstream of health care reform last week, but a looming overhaul of the nation's student-loan market may bring just as large a policy revolution in higher-education finance as Obamacare does for the nation's medical-delivery system.
Private lenders are angry, and many colleges and universities are scrambling to adjust in the next three months, following passage by the Senate and House of a bill of "fixes" to President Obama's signature health care reform. Congressional Democrats used the must-pass bill as a vehicle to push through the long-sought student-loan package as well, making the federal government - not the private sector - the direct provider of federal loans to some 8 million students nationwide annually.
"We were very disappointed," said Elena Lubimtsev, government-relations officer for Tennessee-based Edamerica, one of the nation's largest private providers of student loans. "... We lost our business. Congress took it from us."
But reform backers said the change - revamping a system that dates back to the mid-1960s - will cut out the unnecessary middleman in college lending, the private commercial lenders