Governor McDonnell Writes President Obama About Student Loan Practices

In his State of the Union speech last week, President Obama reiterated how important he considers education for the nation to continue its leadership position in the world in the 21^st century. In addition to proposing a higher education tax credit and debt forgiveness for those who have been paying on college loans for 20 years or more, he called on the Senate to pass a bill similar to the House bill that takes private lenders out of the government-guaranteed student loan process and makes the federal government the only source of the loans. Some of the neediest students and their families in the market for student loans sometimes have been, in effect, victims of private lenders who have acted as middle men in facilitating loans for students. Students using private lenders were placed in the volatile financial markets and took out loans at higher rates than students who were lucky enough to receive a loan originating in Department of Education. The private companies made money on the backs of these students.

But, our Virginia governor, Bob McDonnell, evidently doesn’t like the Obama plan which would help Virginia college students and their families. Instead, he fears that Sallie Mae, located in Reston, VA, might lay off people or not hire new workers because they would no longer be in the student loan business. Last week, he wrote a letter to President Obama asking that he step back from his proposal; unfortunately, it appears that our two senators have chosen to stand with the governor rather than with the president.

Yes, the state needs jobs, but not to the detriment of students. We don’t need to be in the protection business of companies who are making money at the expense of students who are Virginia citizens and the future leaders of tomorrow--students who are already paying more and more each year as the state already has had to make draconian cuts to institutions of higher learning.