With all the fuss over the signed, sealed, and (almost) delivered health care bill, a key part of the legislation has been overlooked: the student loan reform. What student loan reform? In fact, there's a significant portion of the massive bill devoted to this non-health care subject. So why is it there, and what is in it? Conservatives like Michelle Malkin are calling it a "nationalization power grab," but is that accurate?

  • There's a Lot Less than There Could've Been  Inside Higher Ed's Doug Lederman says a fair amount of the loan reform Democrats had planned wound up getting chucked:
In the end, to satisfy budget requirements and win over skeptical deficit hawks in their own party, Democratic leaders wound up directing a total of $19 billion (of the $61 billion in revenues that the student loan shift would produce over 10 years) to reduce the deficit and help pay for the health care portion of the legislation.
  • Of Course: Because Loan Reform Was Just a Budget Gimmick, writes the Washington Examiner Timothy Carney. The idea, he argues, was for Democrats to "[nationalize] an industry and [fold] its profits into the budget, thus partly paying for some radical expansion of government--health care reform in this case."
  • Don't Listen to the 'Government Takeover' Story  Donald Marron, economics consultant, contends that federal takeover of the student loan market really happened--in large part--quite a while ago. The government already "establishes who can qualify for these loans, what interest rates they will pay, and what interest rates the lenders will receive. And the government guarantees the lenders against almost all default risks." All this bill does is, he explains, is "[take] this a step further and [cut] back on the role of private firms in the origination of these loans."  Reihan Salam of the conservative National Review gives this take his stamp of approval, calling it "balanced and thoughtful."
  • Who It Helps, Who It Doesn't  Doug Lederman, following up on his earlier post with a look at the final draft, compiles a student loan scorecard. The Obama folks, he says, " met ... their two biggest goals... : bringing all federal student lending (and the revenues it generates) under their control and using some of the projected savings to invest heavily in the Pell Grant Program to help needy students." Pell Grant students, "historically black and other minority colleges," and private colleges are the big beneficiaries of the final version of the legislation. Private sector lenders are among those losing out. Meanwhile, he says, the bill "has little to no direct implication for student borrowers," and is a "mixed bag" for community colleges as well.
  • The Changes You'll See  Politics Daily's Patricia Murphy outlines how the legislation will affect students starting July 1. The Pell Grant system will remain solvent, she says, while students repaying loans will have a better "customer experience." Pre-existing loans will remain unchanged, as will private loans.