I don't get why student loans is a part of the health care law?

Obama Signs Student Loan Reform Into Law
via LA Times

Obama Signs Bill on Student Loans and Healthcare
via NY Times

Does anyone really understand why this students loans law is attached to the healthcare law (I guess, it's called a reconciliation bill)? I hate when government does stuff like this. I find it to be confusing, hard to follow, and not transparent. It's like when property taxes are used to create a freeway in another county (I hope that's not being done!).

I'm glad that more money will be freed up for actual loans, but I wonder how much banks will suffer because they will no longer be receiving this money they would otherwise had gotten from the loans they give out (they after all are already in dire financial states, but then again, the public did bail them out, so a majority of them could survive? maybe it is fair?). I suppose because they were named "middlemen" in this transaction, banks were creating exorbitant fees for loans--- they were creating loans with extra, extra fees for what? I guess, that was what whoever discovered these fees thought as well, so they brought it to the President to enact a change.

In both speech and substance, Tuesday's event offered a preview, casting the healthcare law as part of a bigger Democratic plan to help American families against monied interests who have profited in their time of economic distress. Just as Democrats fought the insurance companies to reform health care, the president said, they put an end to the role of banks in the college loan process.

I think it's ironic and funny that Republicans are supposed to be fiscally responsible, but then they are also pro-big business. It's kind of paradoxical when you think about them voting against the health care bill because yes, the health care companies will suffer, but the health care companies were not being fiscally responsible when it came to fees and the like. The Democrats are trying to be fiscally responsible with loans/banks/healthcare in this regard because their slogan has been as of late, "Big business stop cheating the American people".

"We can't afford to waste billions on giveaways to the banks" when American competitiveness depends on the fortunes of its students, Obama said.

The White House estimates that the changes in the lending program will general $68 billion in savings over the next 10 years, money that can be used to help expand the Pell Grant program.

Money for me???!!

The new law will also put a cap on college graduates' annual loan payments, so that they only have to pay back 10% of their income.

What is it right now? That will be pretty amazing and helpful, so that college graduates can also enjoy the benefits of their job, rather than having to use a majority of it to pay their loans. Ughhhh nevermind, just read this is only going to apply to those that borrow in 2014.

Haha I think it's funny that he called out Sallie Mae... they call my house non-stop about our payments (but poor them if they do have to do away with a third of their 8,500 employees).

Senator Lamar Alexander, Republican of Tennessee and a former education secretary, also spoke out angrily against the plan to end the subsidies to private banks. Tennessee, too, is home to some big players in the private student lending industry. In a statement Tuesday, he bemoaned the government getting more deeply into the loan business directly. “The Obama administration’s motto is turning out to be: ‘If we can find it in the Yellow Pages, the government ought to try to do it,’” Mr. Alexander said.

The senator said students would be overcharged on their loans with the proceeds used for the health care law. He also said that 31,000 private sector workers would be out of a job and students would be forced to rely on four federal call centers instead of more than 2,000 community and nonprofit lenders---- jives with their argument about big government; the private sector can do it better.

The House Republican leader, Representative John A. Boehner of Ohio, wasted no time in blasting both the health and education components of the reconciliation bill.

“Today the president will sign not one, but two job-killing government takeovers that are already hurting our economy,” Mr. Boehner said in a statement. “Employers across the country are continuing to reveal the costly fallout from ‘ObamaCare’ – including new tax hikes and mandates that make it harder to hire new workers, and put health care benefits promised to workers and retirees in jeopardy. As the White House continues to ‘sell’ this new law, we are seeing the same pattern we’ve seen for the past year: the more the American people learn about it, the less they like it.”

****But the “government takeover” argument may provide difficult to sustain. The health care bill is projected to direct more than 16 million new customers to private health insurance companies over the next 10 years. And the education changes essentially cut private banks out of what is already an entirely federalized program. The student loans are made using taxpayer money, with repayment almost entirely guaranteed by the federal government. The private banks get paid fees to originate the loans, and then sell them back to the government.****

Mr. Boehner also said the education changes would cost “hundreds of jobs in America’s heartland.” But officials have noted that private firms will still be hired to do most of the loan service, and other back office administration; and federal regulations require that to qualify for those contracts the jobs must be performed in the United States. Previously, Sallie Mae, the nation’s largest student lender, had outsourced many of those jobs to service centers overseas. Supporters of the changes say the only cuts are to the profit margins that allow the private banks to offer outsized pay packages and stock awards to their top executives.

Still, public apprehension about the legislation could give Republicans a powerful weapon in this year’s elections. “Republicans will fight to repeal ObamaCare and replace it with common-sense reforms that focus on lowering health care costs while protecting American jobs,” Mr. Boehner said.

Lookout Obama...