PhillyTablet Inquirer Daily News
Mobile
Home Delivery
philly.com
email
font size
options
 
Thursday, December 3, 2009

Casey waters down Obama student-loan plan

A proposal by Sen. Bob Casey, D-Pa., shows Democrats are backing off a bit in their attempt to finance student loans "directly" through the government instead of giving the money to private, for-profit lenders like Sallie Mae, FBR Capital Markets analysts Matt Snowling and Bill Jackson tell clients in a report today.

Casey "has submitted a bill" for review by the Congressional Budget Office that would "retain a larger role for private lenders" than previous legislation. "Under the Casey proposal, lenders would originate loans, hold them briefly, and then sell them to the government at par plus a $55 origination fee." The private lender would also get paid to collect loan payments.

Obama hoped to save nearly $80 billion over 10 years by cutting out the middlemen. The Casey bill would save a few billion less, "but would arguably save thousands of private sector jobs," including new Sallie Mae student-loan job centers in influential Rep. Paul Kanjorski (D-Pa.)'s competitive Scranton-area district, and in Delaware.

At this point, "it's a proposal. We have an eye on the jobs, and we're trying to find a middle ground," Casey spokesman Larry Smar confirmed to me.

Casey's bill "has a higher probability of gaining enough Democrats' votes to pass" compared to Obama's plan, FBR concludes.

 
Posted by Joseph N. DiStefano @ 11:31 AM  Permalink | Post a comment
Comments   


0 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
Advertise Here