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They wont tell you that winning a contract to service Direct Loans was the real motivation behind their decision to return 2,000 outsourced jobs to the U.S. last April. Months later, Sallie became one of four companies awarded a Direct Loan servicing contract by the Department of Education.
Banks also wont tell you that the real choice they are fighting to protect is that of lenders, not students. They want to stay in the federal student loan origination game because it gives them unfettered access to cross-market their private loans to students. Private loans are much more expensive for borrowers and much more profitable for lenders. Weve seen how this plays out and it isnt in the form of true choice or competition for students.
Over the past year, Congress has been focused on finding the best solution for students, families and taxpayers. We have given all proposals on the table fair and balanced consideration.
Mr. Remondi himself testified about Sallie Maes plan before our committee, along with financial aid officers from colleges that had recently switched to the Direct Loan program. Those officers confirmed what a majority of colleges making this transition have told us: that it has been fairly inexpensive, easy and the right move for students.
At the end of the day, House lawmakers saw the banks scheme for what it was and soundly rejected it. Not a single Republican or Democrat chose to introduce it as an alternative proposal, either during our committee markup or on the House floor.
Senators now face the same decision. They can either choose to put the interests of students and taxpayers first a concept that both Republicans and Democrats can get behind or they can fall for the banks latest trick.
Rep. George Miller (D-Calif.) is the chairman of the House Education and Labor Committee and the author of the Student Aid and Fiscal Responsibility Act. Rep. Tom Petri (R-Wis.) is a member of the Education and Labor Committee and a supporter of the Student Aid and Fiscal Responsibility Act.