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.

Senate Democrats signaled that they would add the student loan reform bill to the reconciliation package being prepped for the health care bill. While the House may have to pass the Senate bill fully and have it signed by the President before moving to a reconciliation fix, this sweetener – providing college affordability for hundreds of thousands of students in their districts and ending subsidies for big banks – may make it worth their while to move forward.

Why should the government support the failed business model of Sallie Mae and other student loan finance companies like Citi and JPMorgan Chase? Why isn’t that money going to help students pay for their education?

Conrad doesn’t want student loan reform to pass. Why? Well, because the student lending industry has jobs in North Dakota. Fifty-seven, to be exact. Blanche Lincoln, Jim Webb, Mark Warner, Tom Carper and the Nelson twins are helping him, because they’ve got jobs in their states too. From companies with deep pockets, private jets and personal golf courses to keep up.

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.

Sallie Mae gets cheap money to make guaranteed student loans, and there is a buyer who will pay face value. Surprise: it’s your government. It’s up to Congress to stop this practice and quit acting like saps.

Today, FDL launches its Students Not Banks campaign, with a petition calling on Harry Reid, Nancy Pelosi and members of Congress to pass student loan reform quickly through reconciliation.

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

Sallie Mae makes more money from servicing student loans than it does on its enormous student loan portfolio. Why does it want to stay in a risky business like student loans? Why does it want all that money the government pays private lenders, when it could go directly to students in the form of Pell Grants?