I just received the following email from Citibank, the private lender I was forced to deal with as part of the bank's arrangement with my graduate school:

Citi: Learn about legislation that impacts you

May 7, 2009 Dear XXXXX, Thank you for the opportunity to help you obtain the education of your choice. As a student loan provider for the past 50 years, Citi has provided financial aid assistance to millions of students and parents nationwide. Given the challenging economy and continued increases in the cost of higher education, it is critical that the U.S. student lending system serves the best interests of students and their families. If you believe that competition and choice among student loan providers is valuable, you have an opportunity to make your voice heard. Why Get Involved?

The government budget outline proposes offering federal student loans solely through the federal government's Direct Lending Program starting July of next year. While this proposal will not impact a borrower's ability to obtain a federal student loan, it will eliminate your ability to choose a student loan provider. It will also substantially increase the national debt since each and every federally-insured student loan will be funded by the Federal Treasury through the issuance of treasury securities. This proposal impacts you as a citizen - both as a taxpayer and as a borrower. Why Does Competition And Choice Matter?

Without private lender involvement through the Federal Family Education Loan Program, students and their families will not enjoy the benefits that competition has made possible for more than 40 years. This competition has provided not only a choice of lenders, but also innovative products and services, such as: * a variety of borrower benefits that lower your cost of borrowing

* financial literacy programs that educate you on how to borrow responsibly

* web-based tools and resources to advise you about your financing options

* default prevention services to help you pay back your loans Competition also has driven increased customer satisfaction as a result of the responsiveness, personal attention and on-campus support that student loan lenders have provided to borrowers and schools nationwide. Make Your Voice Heard

If you value the ability to shop for, evaluate and choose your student loan provider, make your voice heard by contacting your Members of Congress and by signing one of the online petitions that support borrower choice and competition in federal student lending. Sincerely, The Student Loan Corporation



This message came as part of the regular email communication from Citibank, which includes the ususally mundane messages of statements arriving and bills coming due.

But you can rest assured that with two-thirds of college graduates with student debts, a lot of people are going to be receiving similar emails.

The policy proposal making Citi so anxious is a plan by President Obama to rein in an industry that makes a killing off of government subsidies to private lenders for services that used to run exclusively through the federal government--without the banking middlemen.

By cutting out the middlemen, the President's proposal would:

save $94 billion over the next decade, money that Mr. Obama would use to expand Pell grants for the poorest students.

Yet this commonsense policy is exactly what Citibank and other taxpayer-funded, bailed-out banks want you their customers to oppose.

Among the obstacles to President Obama's student loan reform agenda in Congress is Sen. Ben Nelson (D-Neb.), who Obama administration officials have indicated they would side-step through the budget reconciliation process. This Citibank email is yet another reminder of why passage of the Obama budget is such a big deal and a reason why we were so cranky when Arlen Specter opposed reconciliation to avoid a Republican filibuster.

Sen. Nelson's rationale is that there are Nebraska jobs at stake based out of NelNet, a Lincoln-based student loan institution.

For Citibank, however, their rationale is some ironic notion of "competition" that might be lost of these loans originated back with the government. In other words, private banks would no longer have guaranteed federal money backing up their loans to students at a marked up rate.

At the end of the email, Citibank provides a link to contact your members of Congress in opposition to student loan reform.

I'd suggest anyone so inclined should use the link they've provided to remind our congressmen and women that we are in fact in support of the President and his efforts to help college students.

We might also point out to our lawmakers that banks like Citi are continuing to benefit from taxpayer bailouts as they rally the public against reform.