Hundreds of students rallied on Capitol Hill Tuesday to support a massive overhaul of student loan programs. The measure would end the role of private banks in federally backed student loans and make the government the primary lender. Student protesters have also converged in Washington to call for passage of the Development, Relief and Education for Alien Minors Act. The DREAM Act would grant permanent citizenship to undocumented workers’ children if they completed two years of college, trade school or military service. [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: We continue on this issue of finances, especially when it comes to young people and student loans. Juan?
JUAN GONZALEZ: Well, banks and other private lenders may be on the verge of losing a profitable $70-billion-a-year business in student loans. The Senate is gearing up to vote this week on a massive overhaul of college assistance programs. The measure would end the role of private banks in federally backed student loans and make the government the primary lender. Tens of billions of dollars in savings from the measure would be diverted into education grants.
The House approved the overhaul as part of the healthcare package now before the Senate. If it passes, the bill would mean the loss of billions of dollars in business to student lending giant Sallie Mae as well as large financial institutions such as Citigroup, JPMorgan Chase and Bank of America. Private lenders have launched an intensified lobbying effort to defeat the measure and send it back to the House.
AMY GOODMAN: Well, on Tuesday, hundreds of students from around the country came to Washington, DC to rally on Capitol Hill in support of the bill. Gregory Cendana is the president of the United States Student Association. He helped organize the rally. He’s joining us from Washington, DC.
Explain exactly what this bill is and what it would mean for students and, well, post-students, people who are paying back their loans.
GREGORY CENDANA: Well, first, I thank you so much for having me.
As you mentioned, this bill is historic, and it’s going to infuse billions of dollars into important education programs. The biggest part of it for us is that it’s going to eliminate the middle person. It’s going to eliminate the subsidies to Sallie Mae, to Citibank and these other banks and lenders, and actually put that money into important higher education programs, like the Pell Grant and supporting minority-serving institutions like historically black colleges and universities, and community colleges, as well.
JUAN GONZALEZ: And Gregory, the impact of this legislation in terms of — for instance, I understand that Pell Grants, which used to represent about 72 percent of what students were paying in terms of tuition, is now down to about 32 percent, as tuition has continued to increase and the grants have not?
GREGORY CENDANA: Yeah, that’s correct. And what we’re really hoping for is for the Senate to pass this, because if the Senate doesn’t pass this and this doesn’t go into law, there’s going to be almost 500,000 students that are going to — that might actually not qualify for the Pell Grant anymore, and there’s going to be different Pell Grant recipients that might see their packages be cut up to 60 percent, if this funding isn’t included with the Pell Grant.
AMY GOODMAN: Gregory Cendana, how are private lenders lobbying against this bill?
GREGORY CENDANA: Private lenders and banks are spending millions of dollars on lobbyists, are infusing the airwaves with lies about what this bill would do.
And one of the things I actually would just bring up right now is that they’re talking about the potential — the potential job loss that this might have. And the reality is, and the truth of the matter is, that the direct loans program actually has to have all the jobs in here, in the US, and one thing that Sallie Mae isn’t talking about when they’re lobbying or when they’re sharing this message on the airwaves is that they actually had to bring back more than 2,000 jobs that they had internationally back to the US in order to actually get a contract with one of the direct — with the direct loans program with the Department of Education.
And so, we’re very aware of the impact to the higher education programs and actually the ability for this job to also move our economy back on track, keep jobs and have jobs here in the US, and be able to fund students and families who need the support so much.
JUAN GONZALEZ: And Gregory, could you talk about what the impact has been on students, the past few decades now, of these huge loans that they end up saddled with as they get out of college, and especially the role of some of the universities in cooking up deals with the banks that provide these loans?
GREGORY CENDANA: Yeah. Well, each year, the average graduate graduates with about $25,000 in debt. And that’s a lot of debt. I mean, even for myself, I’m a recent graduate of the University of California, Los Angeles. I received the maximum Pell Grant, I received a Cal Grant, I had a work-study, but still ended up with more than $40,000 in loans. And my story isn’t singular. Millions of students across the country are having to graduate with massive amounts of debt. We call it like — at USSA, we say it’s like mortgage-size loan debt, where they either have to derail their plans for post-graduate studies or have to take on jobs that actually pay more, even though that’s not what they want to do, to be able to actually afford to be able to pay it back. And what we’re hoping is that we’re going to see increased funding for federal grant programs like the Pell Grant and that students will be able to actually live the life they want to live and not be burdened by these huge amounts of debt.
AMY GOODMAN: The Reverend Jesse Jackson has been a leading voice in the campaign to reform student loans. Last year, he launched this campaign called Reduce the Rate, urging the Obama administration to slash the interest rates on student loans. Well, Reverend Jackson spoke this past weekend at the Left Forum here in New York. This is some of what he had to say about student loans.
REV. JESSE JACKSON: If you come out of here with a guaranteed debt and a guaranteed job, even while you don’t have the job, the tab is still running. It’s compounding interest. Now, if we can — if the banks can get zero percent interest, students should really get zero percent interest. If we can get zero percent interest for the clunker and for the car, the government is charging they’re going to move us now, which is a step in the right direction, from Sallie Mae-type lending, oppressive lending scheme, to the government. And while you’re going to rather befriend the government, that’s alright, but we need not a new lender, we need a new rate. The rate should be zero as opposed to six or seven percent. They make enough money off of student loan defaults to fund the Pell Grants.
AMY GOODMAN: That’s the Reverend Jesse Jackson at the Left Forum in New York this past weekend. Gregory Cendana, president of the United States Student Association, where exactly does this legislation stand? And how did it get tied into the health reform legislation?
GREGORY CENDANA: Yeah, so right now, the current legislation is being debated in the Senate. And after it’s being debated in the Senate, depending on the types of amendments, it’s going to have to actually go back to the House for a vote. But we’re hoping that all this process is going to be finished up here in the next couple of days, actually within the week.
And it got to be a part of the reconciliation package because we knew from the beginning that it was going to have — it would have to go through this, and essentially, because of the savings that it has and the ability to decrease the deficit, we would be able to use the reconciliation process, because of the amount of savings it had.
JUAN GONZALEZ: And could you talk about the DREAM Act that the Obama administration has been supportive of up until this time? What is the DREAM Act? And what would it mean in terms of immigrant children who are students at universities in this country?
GREGORY CENDANA: Yes. So, each year more than 65,000 undocumented citizens graduate from high school that would qualify for the DREAM Act. And essentially the DREAM Act would actually provide a pathway to legalization, as well as qualify them for federal financial aid, specifically with loans and work-study. For far too long, these students — undocumented students, you know, work hard. They’re the valedictorians of — they’re athletes. They’re people who excel in school and have been barred access to higher education, because — simply because this legislation hasn’t passed. USSA has been a staunch advocate and supporter of the DREAM Act since its inception in 2001 and are now seeing that the momentum has been building. Youth, immigrant youth, undocumented students and allies all across the country are saying the DREAM Act must pass, and it must pass now.
JUAN GONZALEZ: But what do you say to those people who say that these students are in the country illegally and they should not receive such benefits?
GREGORY CENDANA: Well, the reality is a lot of these students actually didn’t have the choice to come here. Their parents brought them here when they were very young, so they grew up here and know the United States as their home. We also talk about how we already invest lots of money through K-through-12, and by not investing in their higher education, we’re wasting the money that we’ve invested for that long. And right now, in this economy, what we really need is to continue to infuse money into higher education, because these students, all they want to do is actually give back to their families, give back to their communities, work hard and have a job. And they can’t do that, simply because this legislation hasn’t passed yet.
AMY GOODMAN: And the DREAM Act stands for the Development, Relief and Education for Alien Minors Act, which would grant permanent citizenship to undocumented workers’ children if they complete two years of college, trade school or military service. And we’re going to be following this march that’s going from Florida, fifteen miles a day, to Washington, DC, by students in support of the act. It’s called the Trail of Dreams. And some of those who are marching in this march to Washington are undocumented students. Gregory Cendana, we want to thank you very much for being with us, president of the United States Student Association, a recent graduate of UCLA with a mighty hefty debt himself, $40,000 to pay. Good luck, Gregory.
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