This is a few days old, but it is worth noting that TPM Muckraker recently reported that Citibank, which received $45 Billion in bail out funds, emailed their student loan borrowers and encouraged them to take action against President Obama’s higher education policies.

 The email stressed threats to “competition” and “borrower benefits,” without even mentioning the goal of the proposed policy: to save the government an estimated $94 billion over ten years that could be used to expand the Pell grant program. Any attempt to argue against the President’s proposal must first explain how  saving a broken and wasteful system will increase access to college more than investing billions in need-based grants.

Citibank also touted the lower interest rates that student loan companies were sometimes—often with caveats that keep most students from being eligible—able to provide to students. What they didn’t mention is that Congress passed a bill in 2007 that has already begun to lower student loan interest rates to 3.4% for the 2011-12 school year.

They also failed to mention that benefits provided by lenders are extraordinarily limited at the moment. Congress was forced to rescue the Federal Family Education Loan Program, which would be phased out under Obama’s plan, by providing the capital that banks needed to make new loans. Under difficult financial conditions, few banks offer any significant borrower benefits at all.

Finally, Citibank used the misleading argument that the reforms will increase the national debt because they call for the government making loans directly to students, rather that guaranteeing loans made by banks against default. While technically true, Citibank conveniently ignores the fact that the government is on the hook for 97% of all federal loans that it makes (whether it is counted toward the debt or not). They seem to imply that the proposal is about reckless borrowing, when it is about saving taxpayers money per student loan issued in order to raise the funds necessary for programs that will do a much better job of increasing access to college.

Citibank should be concentrating on raising the $5.5 Billion that they need to survive this recession, not on lobbying for wasteful government subsidies and against the interests of low and middle income students who are also struggling in this economy.