Somewhat overlooked in the drama over health insurance reform last night was that the House also passed a major piece of “student loan reform”:http://www.prospect.org/csnc/blogs/tapped_archive?month=03&year=2010&base_name=another_good_thing_happened_la. Currently the Federal Government offers huge subsidies to the student loan industry. This is basically a good idea, but the effect is that a lot of the subsidies are swept up by the loan providers, i.e. banks. The reforms will allow students to borrow directly from the government. Over the next 10 years, over $60 billion that would have been passed on to the banks in subsidies will be kept in the public purse. Most of that money will be spent on Pell grants, community colleges and historically black colleges and universities. In effect, the legislation is a massive transfer of wealth from the banking industry to higher education, and it will help hundreds of thousands, if not millions, of students attend college who would not otherwise have been able to afford it.

Of course, this assumes the legislation passes the Senate and White House. I keep being told that Obama is just interested in doing the bidding of the banking industry. I assume the people who say this will predict that he’ll veto the relevant legislation. Let’s see if that happens.