College students swarmed Capitol Hill on Tuesday to plead for more financial aid as private lenders made a last push to preserve their endangered role in making federal student loans.
The dueling messages sought to influence Senate action on a proposal to cut funds for lenders that make federally guaranteed loans and channel tens of billions of dollars in savings to scholarships for needy students.
The proposal is attached to a bill the House approved Sunday that resolves various differences among congressional Democrats over health care reform. That bill is separate from the comprehensive health legislation President Obama signed into law Tuesday. If the Senate approves the bill without amendment, it also would go to Obama for his signature. But opponents of the bill are seeking to revise it in the Senate to force another vote in the House.
One potential swing Democrat on student loan issues is Sen. Bill Nelson, Fla., who signed a letter recently urging the Senate to consider alternatives that would not sacrifice industry jobs. But Dan McLaughlin, a Nelson spokesman, wrote in an e-mail: "Sen. Nelson likes the education and student loan reforms. He doesn't like the jobs it could cost in north Florida. But at this point, it looks like it's in the health care and education legislation to stay."
On Monday, Sen. Blanche Lincoln, D-Ark., criticized the bill for including "matters unrelated to health care" and said she could not support it.
Republicans oppose the lending overhaul as an unwarranted government takeover.
The measure would save an estimated $61 billion over 10 years by cutting out private lenders and expanding direct government lending. It would provide $36 billion in Pell grants for students from low- and moderate-income families, including $13.5 billion to plug a shortfall this year.
Lenders say that they also favor cutting government subsidies but that an overhaul should preserve a role for their industry in originating loans. SLM Corp., known as Sallie Mae, says the bill would force the company to shed 2,500 jobs.