FDL was absolutely right about student loan reform. Good on us!

Please support FDL and victories like “Students, Not Banks” with a tax-deductible contribution to the FireDogLake Writers Foundation – even $25 will go a long way.

Nelnet improperly exploits a loophole in the student lending regulations for years, and then last Friday afternoon settled a $1+ billion student loan fraud case for $55 million, just as college students head back to campus. Lovely.

But I’m sure that nothing like this could happen with insurance companies and the Health Insurance reform regulations, or the Wall Street firms and the FinReg rules . . .

Welcome back to campus, everyone.

Now we see one of the reasons the Senate is including student loans in reconciliation — they don’t want to tax rich people (as the House does), so they’re stealing the money from community colleges.

The most economically vulnerable are having their futures hacked away to pay AHIP a 20% fee for doing nothing in the health care process. And Ben Nelson hasn’t even begun shaking the bill down for Nelnet, JP Morgan and Citigroup.

Sign the petition — tell the Senate to take care of students, not banks.

Sign the petition — tell Congress to choose students over banks.

With little public notice or fanfare, the federal government has been providing financial institutions involved in the student loan business with a bailout projected to be over $100 billion. With the federal government now helping to provide the financing for 80 percent of the “private” market for FFEL loans, it is ridiculous to classify it as anything other than a massive corporate welfare system.

Student loan lobbyists have been distributing a memo around Capitol Hill, with the misleading claim that if the FFEL program is eliminated in favor of direct lending, all of these jobs in the industry will be lost.

The bottom line: job losses in a tough economy are nothing to treat lightly, but the claims made by lobbyists don’t hold to close scrutiny, and the jobs impact must be weighed against the number of students currently enrolled in each state if money that could be going to schools is instead propping up a costly and unnecessary industry that is surviving only because of government subsidy.

Find out more about the Students, Not Banks campaign and sign the petition.