The Obama proposal to end “private funding” for college loans will limit or eliminate funding for students from middle class families, those students who earn or whose families earn incomes in excess of the PELL limitations.
This proposal, which was discovered in the Omnibus Budget Bill by Democratic Senator Ben Nelson, Neb.
Senator Nelson also opposes Obama’s suggested changes in the family farm subsidy program which calls to reduce subsidies to the majority of American farms.
“One proposal would overhaul the federal student loan program to guarantee yearly increases in the Pell Grant program. That idea enjoys broad Democratic support. But to pay for the Pell Grant expansion, Obama would end federal support for private lending. And one of the major corporate providers of student loans is NelNet, a company based in Lincoln, Neb., the home state of Sen. Ben Nelson, a moderate Democrat who balked at the stimulus package and teamed up with three moderate Republicans to cut $100 billion from the final bill. Cutting off support for NelNet would cost Nebraska about 1,000 jobs, according to Nelson’s office. Nelson said the move could hurt middle-class students who do not qualify for Pell Grants. “I don’t support anything that could reduce those benefits,” Nelson said.