No on Nelson-Burr

The Senate version of the House financial aid bill passed last week, currently up for a vote, contains an adulterating substance.

According to FutureMajority,

Ben Nelson (D-NE), whose home state is also home to Nelnet, one of the biggest corporate lenders, is trying to weaken the Senate version of the bill and return $3 billion of that to the lending industry so they can continue to line their pockets with corporate welfare.

What I’m hearing is that the cloture votes on Iraq and the DOD reauthorization are going to fail, and the Higher Education Access Act of 2007 will be brought to the floor instead, with voting to be scheduled for today or tomorrow. Right now, Republicans supposedly have 3-6 Democrats willing to side with lenders on the Amendment, so they are likely to see it pass [killing Fair Payment Assurance

Here’s what you can do:Call your Senator and urge them to vote YES on S. 1762, and NO on the Nelson-Burr Amendment. The Capitol Switchboard can be reached at (202) 224-3121, and the operators can tell you who your Senators are.

According to a factsheet put out by Campus Progress,

*The Nelson-Burr Amendment would give $3 billion in corporate subsidies back to banks, which could fund 588,000 maximum Pell Grants.

They say they're giving lenders back the cash to protect competition for lenders and borrower benefits, yet
*according to Finaid.com, lenders spend less than 0.1 percentage point of their subsidy on benefits for borrowers, and
*according to Sallie Mae herself, less than 10% of borrowers manage to take advantage of the advertised repayment benefits.
*The student loan market is already highly consolidated. The current subsidies don't stop Sallie mae from cornering the market. The DoE recently pointed out more than 900 colleges where 80 percent of the college’s federal student loan volume is held by a single lender.

update from the PIRGs:

Analysis of the Nelson-Burr Amendment to S. 1762

The Nelson-Burr Amendment cuts $4.2 billion from need-based aid to low-income students over the next five years and gives the bulk of it to for-profit student lenders.

The Nelson-Burr amendment reduces aid for the neediest students by $290 a year, or nearly $1200 over their 4-year college career.

The amendment lowers the subsidy reduction for-profit lenders from .5% to .35% and pay for it by cutting $4.2 billion from the Promise Grant program.

The Nelson-Burr amendment takes grants away from low-income students and give it back to banks including:
$800 million to Sallie Mae over the next 5 years.
$160 million to Nelnet over the next 5 years.[1]

The Senate bill reduces less from private student lenders than both the President’s Fiscal Year 2008 budget and the House reconciliation bill. The Nelson-Burr amendment would cut back on subsidies even further at the expense of the more than 5 million students who receive Pell Grants every year.

U.S. PIRG urges Senators to vote against the Nelson-Burr Amendment to S. 1762

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[1] Based on current loan holdings.