Two more Democrats signal concern with student lending bill

Two more Senate Democrats have signaled serious reservations about their chamber's student lending reform bill — an early indication that the proposal is in political jeopardy.

Delaware Sens. Tom Carper (D) and Ted Kaufman (D) expressed their doubts about the bill to its sponsor, Sen. Tom Harkin (D-Iowa), in a letter dated Saturday. Primarily, they noted they had concerns about the legislation's plan to prohibit private lenders from servicing federal loans.

Supporters say that proposal, which would essentially shutter companies like Sallie Mae out of the federal loan market, could save the federal government $87 billion over 10 years and lower students' loan payments. However, Carper and Kaufman — who represent the state Sallie Mae in particular calls home — fear the reform could stifle local investment and result in lost jobs.

While they did not explicitly call for the provision's removal from Harkin's bill, they did implore the chairman to reconsider its language.

"We also have concerns over the potential impact on Sallie Mae's operations in Delaware, which employs nearly 700 workers," they wrote. "We ask that as you draft the committee's mark ... you maintain a role for Sallie Mae in the student lending process that recognizes the important services Sallie Mae has provided millions of students and mitigates any potential job loss in Delaware."

Ultimately, Carper and Kaufman's argument echoes concerns already voiced by a handful of other party members, including Nebraska Sen. Ben Nelson and Florida Sen. Bill Nelson. Those lawmakers, too, worry about the federal loan provision's impact on local job markets — a concern amplified in political magnitude by this year's tough midterm elections.

However, they are hardly the only critics of the Senate's education bill, a version of which easily cleared the House last September.

A number of centrist Democrats — including Sens. Blanche Lincoln (Ark.), Mark Pryor (Ark.) and Evan Bayh (Ind.) ‚ have expressed concern over the past two weeks with a handful of the bill's other provisions. Still more Democrats suggested last year they were on the fence about the legislation.

Consequently, it is now unclear whether Democrats have the votes to pass the bill, even if they choose to advance it using the 51-vote reconciliation process.

Democrats have signaled new interest in using that procedure to pass healthcare reform, perhaps even within the next two months. They could also use that as a vehicle to pass education reform, though it is unclear whether they can finish the bill fast enough to couple the proposals.

Nevertheless, both Carper and Kaufman did note a willingness to work with Harkin on those issues of contention, from preserving a role for Sallie Mae to strengthening the bill's protections for nonprofit lenders. In their letter, the two praised other parts of the bill — including its proposed increase of need-based federal grants — and emphasized the importance of education reform during the economic recession.

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