Obama Emphasizes ‘Landmark’ Education Changes in Reconciliation Bill

Posted March 30, 2010 at 10:57am

Placing a capstone on his signature legislative achievement, President Barack Obama on Tuesday signed the health care reconciliation bill into law along with a major overhaul of the student loan industry.

Obama used the bill-signing to highlight the elimination of federal subsidies for private banks that offer student loans, calling it “landmark legislation.”

“What’s gotten overlooked in all the hoopla [over health care] of last week is what happened in education,” Obama told a crowd at the Northern Virginia Community College in Alexandria.

Under the new law, the government will only guarantee student loans provided through the Education Department’s Direct Loan Program. Private banks will still be able to offer student loans, but they will not qualify for federal subsidies.

Obama said the bill eliminated a “sweetheart deal” for banks and would save the government $68 billion in subsidies to banks.

Though the reconciliation bill was intended to fix House Democrats’ problems with the Senate health care bill, which the House passed unchanged on March 21, House Democrats also insisted on including the student loan provisions in the final negotiations on the bill this month.

Among other things, the reconciliation measure softened the “Cadillac” tax on high-cost health insurance plans and increased subsidies for lower-income individuals and families who will be forced to buy health insurance under the new health care reform law.

Dr. Jill Biden, Vice President Joseph Biden’s wife and a teacher, introduced Obama at the event. Speaker Nancy Pelosi (D-Calif.) and House Education and Labor Chairman George Miller (D-Calif.) were in attendance at the signing, as were several other Democratic Members of Congress, Education Secretary Arne Duncan, and Health and Human Services Secretary Kathleen Sebelius.