Since the government guarantees the loans, bank involvement amounts to a giveaway:
Nice work if you can get it. The Obama administration wants to make the loans through the government directly and use the money now paid to banks to increase student aid grants.
At present six Dem Senators are balking at the shift, Thomas R. Carper (DE), Blanche Lincoln (AR), Ben Nelson (NE), Bill Nelson (FL), Mark Warner (VA) and Jim Webb (VA). Most of them are swimming in campaign funds from the institutions that make the loans. But Chris Kromm at Facing South is puzzled by Lincoln's participation in the blockage.
Maybe she's just being a rotten legislator.
Lincoln is likely to be history in November; her approval is way underwater among her Arkansas constituents. But progressives are taking the opportunity to demonstrate that there are consequences for Democrats who block the party agenda in office. Netroots activists including MoveOn have contributed well over $1 million to Democratic primary challenger Bill Halter. Unions and conservation organizations are also on the project of replacing Lincoln. You can join the effort here. I'm sure the guy isn't perfect, but lawmakers like Lincoln need to learn that the people aren't entirely passive.
UPDATE: Latest word is that the Senate Democratic leadership may attach the student loan clawback legislation to the health care bill in reconciliation. Well maybe. Nobody ever went broke betting the Senate can't get something done ... but just maybe someone up there is taking student needs seriously.