In case you missed it, Nancy Pelosi is now confronting the reality that the Congressional Democrats may have promised too much in the way of interest rate cuts for student loan borrowers. It seems as though the proposed interest rate cut of 50% will jeopardize the sale of Sallie Mae, the largest student loan lender in the US.

Why should Congress care about that? Well, the Feds back Sallie Mae’s student loans. If the sale doesn’t go through, or something really unfortunate happens to Sallie Mae, or the new buyer can’t make ends meet as the result of Congress’ new and improved interest rates, the Feds are going to be on the hook for all of Sallie Mae’s student loans.

As it turns out, student loan lending doesn’t really have the fat profit margins in it that the Democrats have been screaming about. In truth, the margins are pretty thin. Thin enough that a 50% interest rate reduction would make student loan lenders like Sallie Mae unattractive, or worse, unable to stay in the business of student loan lending.

This is a classic example of the Congressional Democrats’ uncanny ability to act before they have all of the facts. The 50% rate cut isn’t possible without bringing down the entire student loan lending industry and costing the government billions of dollars. The bottom line for all of you student borrowers out there is that there’s no way for Pelosi and Co., to come out ahead on the interest rate cut, so the Congressional Two-Step begins. It’s interesting to watch how try to they extract themselves from the undeliverable promises they made to you, the students.

In the end, they’ll hold the interest rates constant. You won’t get a rate cut at all. Congress doesn’t really care about the interest rate on student loans, and you? Well, you’ll get over it, right? After all, what’s a broken promise or two between a Congressional Representative and his or her constituents? What Congress is really after is the subsidies they pay to FFELP lenders right now.

If you follow the money, you’ll find that the subsidies that Congress pays to the FFELP lenders don’t go toward those lenders’ bottom lines. They go to you, the borrowers. They pay for loan origination fees, interest rate cuts, debt forgiveness, and education programs designed to help you. Sure, the student loan lenders could pocket the money, but they don’t. Why? Because they understand that the long-term viability of the program depends on them being responsible stewards of the government’s money; distributing the benefits to students; and engaging in healthy competition that benefits the borrower, the lender, and society in general.

When Congress proposes to cut the subsidies they pay to FFELP lenders, they’re really proposing to cut the subsidies the student loan lenders pass along to you. You’re the one who loses in this deal.