The Huffington Post’s investigative arm (apparently they have an investigative arm) just put out a piece on Sallie Mae’s fight to co-opt likely federal student loan reform into a way to gain a larger share of the market.  The piece doesn’t carry the reader along with the kind of narrative fluency as does, say, something in the Nation or Mother Jones, but it’s pretty insightful.

Some key takeaways:

1. Sallie truly is putting its lobbying A-team to bat to make sure that Congress doesn’t approve the Department of Education to monopolize the origination and service of federally-backed loans, as the Obama administration would like it to do.  Instead it’s trying to force smaller lenders out of the future market in exchange for pledging money to go to Pell Grants.

2. Anticipating a Democratic takeover of Congress, it has over the last several election cycles donated handsomely to conservative Democrats to create a favorable climate to keep their market shares.

3. Even if the DoE reform goes through as the President wants, taking Sallie out of the federally-backed picture in the long-term, they still have a lucrative five-year contract to service billions of dollars of federally-backed loans purchased last year to keep money flowing to students in the tough credit climate.  And of course the non-federally backed market, which makes up 15% of student loans.

Oh, it must be tough being in the business of helping middle-class students achieve their hopes and dreams.

Disclosure notice: Your blogger owes Sallie Mae boatloads of money starting six months after he graduates from university

Popularity: 1% [?]