Congress Watch: New House lineup good for student loan industry
The rise of Ohioan John Boehner to majority leader and the likely rise of Californian Howard P. "Buck" McKeon to Boehner's old job as the powerful chairman of the Committee on Education and the Workforce are good news for one industry.
The companies that profit from federal educational loan programs have long been key funders of the two Republicans. According to data provided by the Center for Responsive Politics, companies that make or administer student loans have handed out at least $3.4 million to members of Congress since 2003.
The single biggest recipient of lenders' contributions has been McKeon, who chairs the subcommittee that oversees the Department of Education's lending program and is likely to take over the full committee. He has received $262,000 from them in the past three years. Boehner, who chaired the committee until he was elevated to whip last month, came in a close second with $236,000. In fact, the nation's biggest lender, Sallie Mae, has been the single largest contributor to Boehner since 1989, the CRP data show.
Although Republicans have been saying that the budget reconciliation bill signed by President Bush on February 8 creates tax savings by reducing lenders' profits, the lenders have been telling investors not to worry, thanks to offsetting items buried elsewhere in the bill.
"If you look at the bill overall, there are positives and minuses. So we are not changing our earnings guidance," Sallie Mae spokesman Tom Joyce told U.S. News. Asked about the donations' influence on the bill, a spokeswoman for Boehner E-mailed this response: "Any attempt to correlate political contributions to policy is patently false on its face. The student loan reforms passed through our committee and the House reflect our efforts to reform and strengthen student loan programs on behalf of students and taxpayers. It's worth noting that the legislation did not include key proposals lobbied for by the student loan industry, and in fact the bill achieved savings by reducing subsidies to loan providers as a means to demand greater program efficiency." Representative McKeon did not respond to several calls or e-mails.