Lewis, Wall Street Journal baselessly suggest student loan provisions benefit “favored” nonprofits

On the March 29 edition of Fox News' Fox & Friends, Politics Daily columnist Matt Lewis advanced dubious claims first made by the Wall Street Journal that certain provisions relating to overhauling student loans in the reconciliation bill were added to benefit “a handful of favored nonprofit companies.” The legislation in question eliminates the Federal Family Education Loan (FFEL) program, which, as the New York Times reported, gave commercial banks “guaranteed federal subsidies to lend money to students, with the government assuming nearly all the risk.” Under the legislation, qualifying state-based nonprofits would be able to continue servicing federally subsidized student loans. Lewis and the Wall Street Journal suggested that this provision was added to benefit, as Fox & Friends co-host Steve Doocy put it, “some of” the Democrats' “nonprofit pals.”

Their evidence? The Journal claims that one of the “several dozen nonprofit firms” that could be affected by this legislation, ALL Student Loan, “may have helped its cause by retaining the services of Vincent Reusing, a lobbyist whom the Chronicle of Higher Education has described as a 'personal friend' of” Rep.George Miller (D-CA). Lewis repeated this charge on Fox & Friends. Without explaining how, the Journal claims that ALL Student Loan counts as one of the “favored nonprofits” who will be receiving a new “revenue stream” from this legislation. But considering the Journal itself admits that ALL Student Loan is only one of “several dozen nonprofit firms” that could benefit from the legilsation, it's hard to see how this provision was included in order to benefit one nonprofit who hired one lobbyist who may or may not be a “personal friend” of one of the lawmakers involved in drafting the legislation.

But, on Fox & Friends, Lewis didn't stop there. He also claimed that the student loan aspects of the reconciliation package was included in the legislation because “in order to pass the health care bill,” Democrats “promised that it would be deficit neutral and as you know, they did a lot of maneuvering” to “make the numbers add up.” Lewis claimed that part of the “maneuvering” to make the CBO's “bogus numbers line up” was to add the student loan provision, which has been estimated to save the government $61 billion. What Lewis failed to mention, however, is that of the $143 billion the CBO estimated the health care bill with the reconciliation fixes would reduce the deficit by, only $19 billion of that deficit reduction savings came from the “education provisions” in the bill, which include the student loan overhaul. The Washington Post reported that “most of” the money the federal government will save from overhauling student loans “would go to the popular but oversubscribed Pell Grant program for the burgeoning number of students from low- and moderate-income families.” Also, Lewis forgets that every version of the health care bill created before the student loan legislation was added also reduced the deficit, making it even more unlikely that the student loan overhaul needed to be added to the health care reconciliation bill to obscure the costs of health care reform and make reform seem to “be deficit neutral.”

From Fox & Friends: