Washington — Student-loan companies, faced with the threat of extinction, are finding a glimmer of hope in the Senate’s budget blueprint for the 2010 fiscal year. The spending plan, which will be unveiled later today or tomorrow, will not instruct the education committees in Congress to undertake the deficit-cutting process known as budget reconciliation.
The omission could make it harder for Democrats to push through President Obama’s plan to abolish the guaranteed-loan program. That’s because budget-reconciliation bills, unlike regular bills, are filibuster-proof and require only a simple majority to pass. If the Senate took up the president’s plan through the reconciliation process, it could pass with only 51 votes.
That doesn’t mean that student-loan companies are in the clear. The U.S. House of Representatives is expected to include reconciliation instructions in its version of the blueprint, due out on Wednesday or Thursday. If the House prevails in conference negotiations with the Senate, reconciliation will proceed.
Other factors are also not in the lenders’ favor. Word of the Senate’s plan to forgo reconciliation comes only days after the Congressional Budget Office estimated that ending the guaranteed-loan program would save taxpayers $94-billion over 10 years — twice what the White House Office of Management and Budget had forecast. Those savings could prove irresistible to lawmakers, particularly at a time of spiraling deficits and large spending ambitions. —Kelly Field
