House passes market-based student loan bill: Is it a step toward a solution?
The White House has threatened to veto the GOP-backed student loan bill, but supporters say passage invites input from the Senate to arrive at a compromise before rates jump on July 1.
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While Obama’s plan would also peg the student loan rate to the 10-year Treasury, he would offer a fixed rate for the life of the loan and a narrower spread (ranging between a 1 percent and 4 percent boost to the rate) and would not cap the interest rate. The president’s proposal would also expand programs that help students fit loan payments to their income.Skip to next paragraph
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Democrats say they would prefer to do a student loan fix in the context of a broader look at higher education, with changes to programs ranging from Pell Grants to lower-income students to the data the federal government makes available to families trying to compare different colleges and universities.
But “we’re not going to come together on a comprehensive, long-term solution in the next 40 days that prevents the rates from doubling,” Representative Courtney says.
Instead, congressional Democrats would generally prefer a shorter-term fix that would offer time to implement a comprehensive higher education revamp and at least hold interest rates at their current 3.4 percent or, in the case of Sen. Elizabeth Warren (D) of Massachusetts’s proposal to tie the rate to the ultra-low rate the Federal Reserve lends to commercial banks, cut them severely. (See a comparison of all the different student loan plans from the liberal Center for American Progress here.)
“There actually are a lot of good ideas swirling around out there,” Courtney says.
Capitol Hill has seen some flickers of bipartisan appreciation for higher education initiatives after they were mostly a wedge issue for Democrats to bloody Republicans concerned about their deficit ramifications in the 2012 election year.
The House passed a Republican-sponsored measure, the Improving Postsecondary Education Data for Students Act by unanimous consent on Wednesday, a bill that asks the secretary of Education to determine what data students and their parents should have in order to best compare different institutions of higher learning.
Courtney points out that Kline’s proposal deserves “some credit” for putting a cap on loan rates – even if it’s one he thinks is too high – given the fact that many congressional Democrats aren’t pleased with that aspect of the president’s proposal.
But while the debate will go on, the House took a necessary step toward a solution on Thursday.
“What the House is doing today is a responsible way to deal honestly with the issue of student loans,” House Speaker John Boehner (R) of Ohio told reporters on Thursday. “Can somebody politicize this on the other side of the aisle? Certainly they can.”
“The Senate, when they act,” he continued, “we can go to conference and resolve the differences."
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