Bad Nelson Loses His Student Loan Battle

According to reporting by Ryan Grim at The Huffington Post, the President and Congressional negotiators have agreed that student loan reform, specifically to reduce the subsidies to student lenders (of which Senator Ben "Bad" Nelson of Nebraska has always been particularly protective) will not require 60 votes in the Senate.

Nelson is perhaps the Senate’s fiercest protector of subsidies for student lending institutions, which, not coincidentally, are an engine of job growth in Nebraska. He has vowed to block any effort to reduce those subsidies. And given that Democrats have 58 members and generally need 60 to break a GOP filibuster, he can enforce his will on his colleagues.

An agreement struck between the president and House and Senate negotiators won’t give Nelson that chance. A process known as "reconciliation" allows budgetary measures to be moved through the Senate with a simple majority, rather than 60. Multiple congressional sources say that congressional Democrats have decided to use reconciliation to go after student-lending subsidies, specifically to get around Nelson.

Without a requirement for 60 votes in the Senate, it’s likely the subsidies to voracious student lenders will be trimmed considerably, since there won’t be any reason to accommodate the banks’ defenders in the GOP — and Bad Nelson. Most Democrats view the huge federal subsidies, alongside the 100% federal guarantee, as one of the most egregious examples of corporate welfare: banks skim federal money that if allocated to student loans directly would get lots more people educated and lifted out of poverty.

This is a huge victory for student borrowers everywhere. I wonder if Bad Nelson’s bad-faith star turn on the stimulus bill had any effect on his colleagues’ willingness to dump his pet project into the non-filibusterable reconciliation process?

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