Hey Big Lender

March 9th, 2010

A follow-up to my earlier piece about student loans, inspired by Senate holds up plan for student-lending overhaul : Ending banks’ role in federal aid riles up Republicans (Washington Post 1/29/10), Investing in students, not banks (US Secretary of Education Arne Duncan, Washington Post 2/26/10) and And now for students, Big Lender (Sen. Lamar Alexander, Washington Post 3/07/10), Sen. Lamar Alexander Is Making Things Up (Chronicle of Higher Education 3/07/10), and Lamar Alexander slams student loan overhaul (Tennesean.com 3/08/10).

“Here is what they haven’t told us: The Education Department will borrow money at 2.8 percent from the Treasury, lend it to you at 6.8 percent and spend the difference on new programs.” – Sen. Lamar Alexander (R-TN), Washington Post 3/07/10

“Nonprofit lenders such as Edsouth use the revenue generated under the student-loan system to operate and provide these valuable benefits—but of course, these services cost money.” – Sen. Lamar Alexander a few paragraphs later 

“Under current law, taxpayers provide as much as $9 billion each year to subsidize guaranteed student loans issued by banks. The banks earn profits on the interest; if students default, taxpayers take the loss, not the banks. In other words, working Americans pay while bankers get rich.” — US Secretary of Education Arne Duncan, Washington Post 2/26/10

Lamar, Lamar,

Sorry your nonsensical talking point to mar.

In your effort, student loans to politicize,

You praise the same thing that you criticize.

For a man of distinction such as yourself,

I’m surprised you would contradict yourself.

I suspect that the reason for your attack on the federal “Big Lender”

Is that when it comes to contributions, it’s not a big spender.

Private lenders, on the other hand, are,

And to protect their interests, you’re willing to go far.

You do what those Big Spenders want you to

(As long as they spend time and money on you).

Have the banks given you so much

That with reality you’ve become out of touch?

You’re in favor of a private option for everything,

But when it comes to the savings a public option can bring,

All of the sudden you’re opposed.

(Could it have something to do with the contributions you disclosed?)

You say you want choice

(About which Dems usually rejoice),

But when it comes to healthcare reform or reproductive rights,

You’re securely in the GOP crowd which to eliminate choice fights.

When the federal student loan program was created,

Republican supporters of choice should have been elated.

But no (what a surprise!), most Republicans were against it.

How does that with your alleged support of choice fit?

You’re also against welfare–except for the corporate variety,

Promoting which you and your party have acquired notoriety.

But nobody’s saying that the private sector can’t lend anymore,

They just won’t get the subsidies they got before.

Private lender Edsouth (coincidentally from your home state,

Who by your account is really great)

Is a “non-profit” lender, which I commend,

But they can still enormous salaries (and campaign money) extend.

You use Edsouth as a poster child

The purpose of which is that the public be beguiled,

Just like the agricultural lobby touts the family farm

Since giant agribusiness companies have a lot less charm.

You tout that Edsouth is a non-profit

(Most lenders aren’t, you neglect to admit),

But even though Edsouth is a 501c3

They can still pay executives a hefty salary.

I’m sure CEO Ron Gambill makes over a mill,

And the funny thing is, taxpayers foot the bill.

There’s no risk because of government guarantees

And profits come from taxpayer subsidies.

You praise Edsouth because the money they make from a student loan

(The very same thing that you with the Education Department bemoan)

Is reinvested in providing “valuable benefits” to students,

Continuation of which you say removal of subsidies prevents.

But the “valuable benefits” which you say Edsouth provides

Are mostly just self-marketing in more attractive guise.

And don’t you see the irony that you praising Edsouth for doing the same thing

That you just criticized the Department of Education for? (Let hypocrisy ring!)

You say keep giving Edsouth subsidies because noone else will provide those services

(Normally that’s a view the average free marketer dismisses),

But you somehow don’t mind if Pell Grants and other federal education programs are cut

(Sorry, but when you say that, you come across as a nut).

You also say that the government should be forced to admit

To students who a loan application submit

That it will be “as enjoyable as going to the Department of Motor Vehicles”

Because of the government’s bureaucracy and rules.

The horrors of the DMV

Is a favorite canard for the GOP.

But DMVs are run by the state,

Which Republicans otherwise portray as great.

I had both private and public student loans, and for me,

Applying for both was equally easy.

But the federal program had extra protections for students,

Which the private lending program circumvents.

Finally, you say the $87 billion savings isn’t real—

The true savings is “only” $47 billion, you reveal.

Even if you’re right, that’s still not bad.

Why not save money where savings are to be had?

Sorry, Lamar, but I trust “Big Lender”

More than I trust your private Big Spender.


Here’s the classic oldie from which this post takes its name, from the movie Sweet Charity (choreographed by the immortal Bob Fosse).

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4 Responses to “Hey Big Lender”

  1. Newsericks Says:

    Erin Dillon of Washington DC makes a good comment on the “The joy of repaying a student loan” in the March 13 Post (http://www.washingtonpost.com/wp-dyn/content/article/2010/03/12/AR2010031204088.html).

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