By JACQUES STEINBERG | from The Choice, a NY Times Education blog
February 5, 2010 -- We’ve been talking all week on The Choice about President Obama’s plans for financial aid, including his proposal to phase banks out of the student loan business and to use hundreds of millions in dollars in government savings to boost the Pell Grant program.
But in a front page article in Friday’s Times, Eric Lichtblau writes that “an aggressive lobbying campaign by the nation’s biggest student lenders has now put one of the White House’s signature plans in peril, with lenders using sit-downs with lawmakers, town-hall-style meetings and petition drives to plead their case and stay in business.” He adds:
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. 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 because they were not authorized to discuss the matter publicly.
>>Education Secretary Arne Duncan said the lending industry's lobbying campaign had been anticipated. John Amis/Associated Press>>
Mr. Lichtblau said that supporters of the measure were preparing a counterattack, but that opposition to the president’s plan was deep-pocketed. For example, Sallie Mae, a publicly traded company that is the nation’s biggest student lender ($22 billion in loans originated last year), “led the field in spending $8 million on lobbying in 2009, more than double the year before,” Mr. Lichtblau writes, adding that “other lenders spent millions of dollars more, according to an analysis prepared for The New York Times by the Center for Responsive Politics.”
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