Secretary of Education Arne Duncan’s op-ed in the Washington Post today discusses the importance of providing direct student loans to help more poor and middle-class students attend college. He explains that under the current law, “working Americans pay while bankers get rich.” The banking industry is pushing against President Obama’s education proposal in order to protect its taxpayer subsidy, which has generated billions in profits for banks and compensation for executives. Secretary Duncan writes:
The banks have had plenty of help with government bailouts and other subsidies while working families and students are increasingly squeezed. President Obama wants to eliminate the subsidy for banks and use that money to help poor and middle-class students and adults attend college.
The president also wants to strengthen community colleges, give grants to states that improve college completion rates and boost early-learning programs. He wants to lower maximum monthly payments for student loans from the current 15 percent of income to 10 percent to make college debt more manageable.
Not surprisingly, the banks are working hard to block our common-sense proposal. Sallie Mae, the largest player in the student lending business, has spent millions of dollars to lobby Congress and run ads in several states, claiming that our proposal will cost jobs and inhibit service. These claims must be challenged.
President Obama’s proposal is currently awaiting Senate consideration, learn more about the proposal from our blog post back in April when he first announced the proposal.