WASHINGTON, D.C. — Despite Rep. John Kline’s calls on the House floor today to keep the private sector involved in federal student-loan programs, the House voted to essentially expel private lenders from the entire business in one of the biggest overhauls of college aid in the last 50 years.
“Today’s vote was about expanding the size and scope of the federal government through tens of billions of dollars in new entitlement spending and the elimination of choice, competition and the innovation of the private sector,” Kline said in a statement following the 253 to 171 vote.
Kline, who is the top Republican on the House Education and Labor Committee, attempted to offer an amendment to the bill that would have preserved the private sector’s involvement, but it was rejected.
The Minnesota delegation split along party lines with Kline and GOP Reps. Erik Paulsen and Michele Bachmann voting against the bill and Democratic Reps. Tim Walz, Betty McCollum, Keith Ellison, Collin Peterson and Jim Oberstar voting for it.
In a July estimate, the Congressional Budget Office estimated that replacing new loans in the existing guaranteed-loan program with new direct loans originated by the Department of Education would save taxpayers about $80 billion over nine years.
In a statement released after the vote, the American Federation of Teachers expressed support for the legislation.
“We applaud the U.S. House of Representatives’ approval of this legislation, which correctly redirects savings to make it easier for the neediest students and their families to afford college, and provides direct investment in community college programs and infrastructure,” said Randi Weingarten, president of the American Federation of Teachers.
Staff on the Senate Health Committee are reportedly drafting similar legislation. The issue is a priority for the Obama administration.
Find out more about the bill here.