This blog used to be about debt. Now it's about a few more things. But really, it all comes back to debt. Trust me.

Sunday, December 3, 2006

The Smell Of (BIG) Fish

I knew there was something fishy going on with the explosion of Student Loan consolidation companies. It ain't just the low interest rates (they're not that low anymore).

Check out this article at the Chronicle of Higher Education from back in 2004 about political contributions from the Student Loan industry.

The highlights:

A Chronicle investigation reveals that over the last year and a half, officials with the loan industry and proprietary institutions have given, individually and through political-action committees, or PAC's, almost $1-million in campaign contributions to the 49 members of the House Committee on Education and the Workforce....

More than half of the money, about $540,000, has gone to the two Republican lawmakers in charge of drafting the higher-education legislation -- Reps. John A. Boehner of Ohio, who heads the full committee, and Howard P. (Buck) McKeon, who leads the panel's subcommittee on higher education....

So what were the big spenders after?

Lobbyists for proprietary institutions, for example, are pushing lawmakers to relax certain rules that institutions must follow to participate in the student-aid programs. Congress wrote those provisions into the law in the early 1990s to crack down on fly-by-night trade schools that had been set up to bilk aid dollars from the government.

It sure does seem easier to get into the Student Loan game. I'll keep digging, but is there any doubt that the lobbyists got exactly what they wanted?


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