The President's call for a cut to the subsidies of private student banks in his 2008 Budget may well be the most significant proposal in his entire budget.
What do Ted Kennedy and President Bush have in common?
Both are making the multibillion-dollar student loan industry incredibly nervous.
Both want to slice the taxpayer subsidies the industry enjoys - subsidies that make student loans "the second most profitable business for banks, after credit cards," says Kennedy.
Both say students will benefit.
It is no secret that the federal government could more efficiently use its education tax dollars to help students. The lenders are gearing up for a major fight this year, likely retaining new lobby firms, media spokespeople and preparing for a new onslaught of campaign contributions. 2007 could look a lot like 1993 when then President Clinton proposed major reform to the loan programs that created Direct Student Lending.
"It's a different game today," said Michael Dannenberg, director of education policy at a Washington think tank, the New America Foundation, and a former education adviser to Kennedy, who chairs the Senate education committee. "Not just because there's a Democratically controlled Congress, but because they've been triangulated by the president."