Senator Kennedy and Co., want you to believe that they’re saving money by taking it away from the evil hordes of FFELP lenders who are circling like sharks and who are making money hand over fist off of the backs of innocent students. It’s easy to hate the FFELP lenders because, according to Kennedy, they’re all out to rip off students.

The truth about Kennedy’s plan is that it cuts the FFELP lenders’ profit margins on students loans in half – from $0.04 per $10 to $0.02 per $10. Yes, you’re reading that correctly. $0.04 per $10. One penny per $2.50 in loans. According to Senator Kennedy, that one penny is far too much profit. If a student takes out a $5,000 loan, the lender will make $20. Kennedy wants to cut that in half because $20 in profit is apparently scandalous.

If Kennedy really wanted to save students money, there are many productive ways he could make this happen. The reality is that Kennedy has a political axe to grind with the FFELP lenders. Cutting their profit in half isn’t going to do one thing to lower the cost of college tuition. It will, however, make it more difficult for students to find the college funding they need.

You see, the FFELP lenders are, for the most part, honest and fair. They’re not some faraway corporate entities you’ve never heard of; they’re your local banks and credit unions. They’re the ones who will be cut out of the program, and the faraway corporate entities will survive.

If you’re saving for a college education for yourself or someone else, be sure to thank Senator Kennedy when you find out you don’t have enough saved for college and you can no longer get a loan because your local lenders no longer offer them.