photo: jk5854 via Flickr
Indiana’s Sen. Evan Bayh continued his farewell tour yesterday, kicking it off the day with support for reform of the filibuster during an interview with Andrea Mitchell on MSNBC. This was a surprise to many who find the current state of gridlock immensely frustrating and who also believe Bayh to be a key part of that gridlock.
But by afternoon he was his usual ConservaDem self, pleading for student loan firm Sallie Mae and the jobs Sallie Mae provides in his home state. Student loan financiers have been under fire for their expense and hassle which discourages students and locks them into a debt-spiral, while acting as an expensive middleman at the estimated cost of $89 billion over ten years. President Obama made it a priority to change this situation, declaring himself ready to fight for reform of the student loan system. The fight has made it through the House with the passage of H.R. 3221, Student Aid and Fiscal Responsibility Act of 2009 in September of this past year. The bill is now facing the usual Senate evisceration in the Senate Committee on Health, Education, Labor, and Pensions.
Indiana is deservedly gun-shy about job losses; the state has taken a beating over the last several years with layoffs and terminations due to the downsizing of the automotive industry. One might think Bayh’s concern about the 2,356 workers employed by Sallie Mae in Muncie and Fisher, Indiana locations was reasonable.
But the jobs at Sallie Mae are likely attributed to servicing student loans, not originating them. The loans won’t go away altogether, they’ll merely be funded on a more direct basis with loan origination handled by the government, rather than through private sector firms reimbursed by the federal goverment. Sallie Mae will probably always service student loans since they have the best software for doing so. So these Indiana-based jobs won’t go away simply because Sallie Mae can’t originate loans any more.
Which begs the question: what kind of jobs are these and why will taking loan origination — not loan servicing — away from from Sallie Mae hurt these jobs?
And then there’s all the jobs and the students in Indiana which will be impacted if the Senate does not pass this bill; let’s look at the numbers.
Total estimated faculty 13,437
Total estimated staff 20,000
Total estimated students 148,307
| School | Faculty | Students | Notes |
| Indiana University | 2,007 full time, 354 part time | 40,354 | [1] |
| Purdue University | 6,614 | 39,697 | [2] |
| Indiana State University | 436 | 10,534 | [3] |
| Vincennes University | 301 | 4,522 | [4] |
| Ball State University | 955 | 20,423 | |
| Univ. of S.Indiana | 821 | 10,576 | |
| Univ. of Notre Dame | 1241 | 11,733 | |
| DePauw University | 254 | 2,350 | |
| Earlham College | 97 | 1,194 | |
| Valparaiso University | 220 | 3,874 | |
| Univ. of Evansville. | 137 | 3,050 | [5] |
[1] Unclear whether this is total faculty and enrollment for all (10) campuses or only Bloomington.
[2] Unclear whether this is total faculty and enrollment for all (15) campuses or only West Lafayette.
[3] Unclear whether this is total faculty and enrollment for all (4) campuses or only.
[4] Estimated number based on student per class ratio provided by school.
[5] Estimated based on overall state average student to faculty ratio.
There’s a sizable economic benefit per student to each of the communities in which these schools have campuses. (There may be community colleges which are impacted as well, but not listed here; you get the drift.) There’s also a magnet effect generated by colleges, stimulating growth; a study in neighboring Michigan revealed that the greatest economic growth occurred near college towns, with the largest schools having the greatest growth. If school loans remain challenging for students, one would surely expect a negative affect on college communities’ economic growth as students are challenged financially to stay in school.
So why would Bayh place a premium on a nebulous number of jobs affiliated with a single industry in a small area of the state of Indiana, at the risk of jobs and economic growth across the entire state? Why would he ask the rest of the states to protect an unidentified number of loan origination jobs at the risk of their own economic growth and the additional $89 billion expense over a decade?
Perhaps we ought to ask Earl Goode, who has served as chief of staff to the governor of Indiana since 2006, and served as deputy chief of staff from April 2006 to November 2006, and who coincidentally serves on the board of Sallie Mae. Would Mr. Goode be able to shed any light on this tradeoff?
