Time running out to find deal on student loan interest rate
June 22, 2012
This blog post was originally published on the Hill's Congress Blog on June 22, 2012.
At yesterday's rally with college students, President Obama rightfully reiterated that the federal student loan interest rate must not rise from 3.4% to 6.8% on July 1. He said, "[w]e're 10 days away from nearly 7.5 million students seeing their loan rates double because Congress hasn't acted. This should be a no-brainer. It should not be difficult. It should've gotten done weeks ago."
The president is right, and that's same the case I - and my House Democratic colleagues - have been making for months. Unfortunately, House Republican Leadership is still stonewalling and does not appear to be taking the issue as seriously as it warrants. Rather than focusing on helping students or getting Americans back to work, Speaker Boehner instead jammed through two controversial bills this week that endanger the environment and our public lands and provide additional giveaways to Big Oil. Even prior to this week, the issue was left out entirely of House GOP's "Summer Legislative Agenda" and it was reported that Speaker Boehner privately called the issue a "phony" fight, and he said it was unlikely that Congress would prevent an interest rate hike before July 1.
This is unacceptable, and there is nothing "phony" about this for the millions of students who will see their rate double on July 1.
As a graduate of Salem State College, I understand the importance of public education. However, when I was a student, I was able to work a few jobs and pay my room, board and tuition. That's just not the case for students today. Students are working multiple jobs, choosing schools that are more affordable than others, and still carrying tens of thousands of dollars in student debt.
A few years ago, when Democrats controlled the agenda in Washington, we took real steps to lower the cost of college and provide our students with options and transparency.
Between 2007 to 2010, we increased Pell Grants from $4,050 to $5,550, cut the interest rate on Stafford Loans in half, required schools to post a cost calculator online so families could see what four years would really cost with all the add-ons, we rewarded states that maintain their effort to provide consistent and adequate support for public higher education institutions, we created an income based repayment plan so students can afford their loan payments despite the career they pursue, and the list goes on.
But while I hear from students around our area that these reforms were helpful and constituted progress, I also know that for many of them, college debt is still a real concern. The last thing they need is for their interest rate to double overnight on July 1.
Earlier this month, I spearheaded a letter, signed by more than 100 members of Congress calling on Majority Leader Eric Cantor (R-Va.) to bring responsible legislation to the House floor in the coming weeks that will prevent interest rates from doubling. While he may have left this critical issue off of his party's "Summer Legislative Agenda," there is still time for him to take a leadership role and ensure this burden is not added to our middle-class families and students.
I still believe that the bill I introduced months ago, the Stop the Rate Hike Act of 2012, which would keep the interest rate in check for another year by closing one tax subsidy for Big Oil, is a sensible and commonsense proposal, but I am open to alternative ideas. I certainly oppose the original bill introduced by my Republican colleagues – which paid for the one year "fix" by cutting funds for preventive health care for women and children – but I urge my colleagues to join me in finding an acceptable offset to pay for the cost of keeping the need-based student loan rate at 3.4% for another year.
The current student loan interest rate stalemate is unnecessary and leaving millions of students and families frustrated. A Republican colleague from California acknowledged in a recent public hearing, that it is incumbent upon the Majority in the House, currently his party, to foster bipartisanship. As we watch the days tick by, it is time for Republican leadership to put the partisanship aside and find a deal and prevent the student loan interest rate from doubling on July 1.
Rep. Tierney (D-Mass) is the only New England member on the House Education and the Workforce Committee, and author of the Stop the Rate Hike of 2012.