All 54 Senate Democrats present successfully voted to defeat the amendment, offered by Sen. Ted Cruz (R-TX). If passed, it would have put the Senate on record in support of a repeal of
provisions that moved student loans from commercial banks to direct lending from the U.S. Education Department and:
- Used half of the the estimated $61 billion in savings to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $5,975 by 2017, while indexing the grants to inflation.
- Lowered monthly payments on federal student loans and shortened the debt forgiveness timeline. For new loans after 2014, this will mean graduates will have to pay 10 percent of disposable income, instead of 15.
- Provided $2.55 billion to support historically black colleges and universities and minority-serving institutions; $2 billion for community colleges; and $750 million for a college access and completion program for students.
Such a repeal would have meant a return to larger payments, smaller Pell Grants, and reduced support colleges and universities while putting billions of dollars back in the coffers of Wall Street banks. But in his floor speech explaining the amendment, Cruz told his colleagues only that his proposal was about defunding and repealing Obamacare, making no mention of the billions of dollars he would take from higher education to give back to for-profit banks.
Though every Congressional Republican voted against the health care and student loan reforms, House Republicans specifically exempted the student loan reform provisions from previous repeal attempts, though they have repeatedly slammed the reform as a “Washington takeover” of the student loan industry.
According to the Center for Responsive Politics, Cruz received more than $180,000 in PAC contributions from the financial sector in his 2012 campaign.