When President Obama signed the Affordable Care Act into law, he not only completed the long, arduous task of health care reform, but also made official significant changes to the federal student loan system. The Student Aid and Fiscal Responsibility Act (SAFRA), which was included in the Affordable Care Act, cut billions of dollars in senseless subsidies that student loan companies were receiving to originate federal student loans, and plowed the money into deficit reduction and an expansion of the Pell Grant program.
At the time, student loan reform earned the scorn of Republicans, who falsely characterized is as a “Washington takeover” of student lending, in which the federal government was “seizing control of industries.” Several Republicans made student loan reform into a campaign issue, with Sen.-elect Ron Kirk (R-IL) calling it “a complete government takeover of all student loans.”
But interestingly enough, while House Republicans are undertaking much-ballyhooed effort to repeal the Affordable Care Act (and have scheduled a repeal vote for January 12), their repeal bill specifically exempts student loan reform. Here’s the legislative text of their repeal bill:
Effective as of the enactment of the Health Care and Education Reconciliation Act of 2010 (Public Law 111–152), title I and subtitle B of title II of such Act are repealed, and the provisions of law amended or repealed by such title or subtitle, respectively, are restored or revived as if such title and subtitle had not been en acted.
Title II, Subtitle A of the Health Care and Education Reconciliation Act — which is the section dealing with student loans — remains untouched.
It’s not surprising that the GOP would want to conveniently forget their opposition to SAFRA and leave the measure intact. After all, repealing it would place bankers back in between students and their loans, wasting taxpayer money. Repealing the Affordable Care Act will already increase the deficit, without piling the savings from SAFRA on top. According to an analysis by CAP Senior Fellow Ulrich Boser, the boost in incomes due to student loan reform will top $100 billion, as more students have access to higher education and thus higher lifetime earnings.
So it seems that all the wailing and gnashing of teeth in which the GOP engaged during the student loan reform debate was nothing more than theater, designed to score as many points off of calling various Democratic policies “takeovers” as they could. We should remember this when some policy idea inevitably receives that particular label from Republicans in the 112th Congress.