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Financial Planning > College Planning > Student Loan Debt

Why Is Health Care Reform Being Bundled with the Student Loan Industry?

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What do student loans and health reform have in common? According to the Obama administration, apparently a lot.

Obama wants to remove banks from the student loan process, shifting money in the program that currently goes to overhead and/or bank profits to tuition payments, helping more students for the same amount of spending. Legislation to implement these reforms has passed the House, but has stalled in the Senate due to a Republican filibuster. Sound familiar? Democrats can use reconciliation to pass student loan reform, but there’s a catch – the reconciliation process can only be used once per session. The solution? Combine student loan reform and health reform bills into a single piece of legislation.

Uh, what?

I’ve questioned before whether the Democrats were getting out of hand by suggesting passing health care under reconciliation, and in that case I was on the fence. But here I really do feel like combining these two completely unrelated bills reeks of abuse of power. Although it might make sense from a legislative perspective, the general public no doubt senses that the Democrats are simply taking the easy way out on their hard-to-pass bills.

This isn’t the first time that bizarre mash-up reconciliation has been used, of course. The CORBA law was also a reconciliation act which included provisions far beyond the extension of health coverage. And you’ll often see regular legislation where unrelated amendments are tacked onto bills that have nothing to do with the original subject. But when it all comes down to a simple majority vote, packaging health reform and student loans together seems a little bit crazy.

What do you think? Are the Democrats getting out of hand? Or is there enough legislative precedent to justify their actions?   

Heather Trese is the associate editor of the Agent’s Sales Journal.


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