Industry lobbying imperils overhaul of student loans

Four months ago, it appeared all but certain that the White House and Democrats in Congress would succeed in overhauling the student loan business and ending government subsidies to private lenders. But an aggressive lobbying campaign by the nation’s biggest lenders has now put one of President Obama’s signature plans in peril, reports the New York Times, with lenders using sit-downs with lawmakers, town-hall-style meetings, and petition drives to plead their case and stay in business. Obama called the idea a “no-brainer” last fall, predicting it would take billions of dollars from the profits of private lenders and give it directly to students, and many colleges already have moved to get loans directly from the federal government in anticipation of the next move by Congress. But House and Senate aides say that the administration’s plan faces a far tougher fight than it did last fall, when the House passed its version of the bill. The fierce attacks from the lending industry, the Massachusetts election that cost the Democrats their filibuster-proof majority in the Senate, and the fight over a health-care bill have all damaged the chances for the student loan measure, said the aides, who spoke on the condition of anonymity. But they said the administration had recognized the threat and was beginning to push back in an effort to get the plan approved…

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