Wells tries to keep stake in student loans

Student loans are the next economic sector to be taken by USAGov. Inc. Today, Rep. George Miller, D-Martinez, introduces the Student Aid and Fiscal Responsibility Act, which would put the $100 billion-a-year guaranteed student loan program entirely in the hands of the feds. Banks such as San Francisco's Wells Fargo & Co. could be shut out from their long-standing involvement in the program.

There will be (a) resistance to what some will see as the next step in our march to socialism; (b) concern that the scheduled July 2010 changeover is too soon to be absorbed by the 4,400 or so colleges affected; and (c) suggestions that a private-sector component side by side with the government program would make for healthy competition, thereby enhancing the program's overall effectiveness. Don't bank on any of the above to alter the bill's trajectory.

In a statement, Wells Fargo said it believes the changes "will have unintended consequences that are not in the best interest of the students and their families." It did not elaborate on those consequences, including what they might mean for Wells, which has been one of the more prominent banks in the student loan business.

John Dean, counsel for the Consumer Bankers Association, said private banks are probably relieved to get out of the origination business, which, in these credit crunch days, has become more trouble than it's worth. Besides, fees earned handling student loans are small potatoes on most banks' balance sheets, including Wells', he believes. Bank critics think such fees have been more lucrative. In Dean's view, however, the contacts that banks establish with youthful borrowers via the loan program are truly worth their weight in gold. Think future customers.

Last month, the Department of Educationchose among six finalists, including Wells Fargo, for long-term contracts to service its existing direct loans. Unfortunately, Wells didn't make the chosen four. However, I'm told, the proposed government takeover of the entire guaranteed student loan program will "build on" the department's choices. Which leaves Wells in there with a chance.

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Affordable housing: Seems like only yesterday (it was August) when real estate mogul Victor MacFarlane put his 20,000-square-foot penthouse in San Francisco's St. Regis Residences on the block for a princely $70 million. Now, the real estate blog Curbed SF informs us, the price for his unfinished six-bed, six-bath home-away-from-home has been reduced to a serflike $49 million. Quite a comedown for the proprietor of MacFarlane Partners, the S.F. real estate investment firm with $11 billion under management the last time we checked. Almost as low as the $39.5 million asking price for that brick Tudor Revival in Pacific Heights once owned by the late "King of Torts," Melvin Belli.

Camouflage to green: Bay Area vets organization Swords to Plowshares just received $300,000 from the Labor Department to help Iraq and Afghan war returnees train for green jobs. The nonprofit says it will use the grant, part of a $7.5 million nationwide program, to counsel the recently returned vets, enroll them in training programs, and work with clean-tech employers to help place the returnees. More information at www.swords-to-plowshares.org.