Thompson: Senate and White House must stop playing politics with student loans and pass a long-term fix

Jun 6, 2013 Issues: Education

Washington, D.C. – On May 23, 2013, the House of Representatives passed H.R. 1911, the Smarter Solutions for Students Act, a bill based on the President’s 2014 budget request that would provide a market-based variable interest rate for federal student loans. Today the Senate voted down two separate loan proposals, one of which was similar to H.R. 1911. Absent congressional action, loan rates are scheduled to skyrocket from 3.4% to 6.8% on July 1, 2013. U.S. Representative Glenn ‘GT’ Thompson issued the following statement:

“The House passed a bipartisan proposal which draws on the President’s request for a market based solution to student loan rates. Rather than encouraging the Senate to join the House in a good-faith effort, the President chose politics over students and threatened a veto, for a solution that is based on his own proposal. Students and their families deserve certainty, what they do not deserve is to be used as political pawns by the President. The Senate’s failure to advance a responsible plan that serves the best interests of borrowers and taxpayers is absolutely unacceptable. We can prevent this rate hike and protect taxpayers, but we need the President to start leading and the Senate to stop politicking and pass a bill.”

In Case You Missed It:

  • Forbes Magazine (June 5, 2013): President Obama Punts Away from Free Markets on Student Loan Reform: "Since the early days of his administration, President Obama has enjoyed a reputation as a higher education reformer…Two years ago he famously warned colleges and universities that they were “on notice” to contain the rising cost of college. And his 2014 budget proposed tying the student loan interest rate to the market, an idea strikingly similar to one introduced by Republican Senators Tom Coburn and Richard Burr last year. But in the Rose Garden on Friday, the President reminded us that while he sometimes sounds like a reformer, he often acts like anything but. Flanked by eager college students, the President reverted back to the 2012 campaign, warning Congress not to let the interest rate on subsidized student loans double on July 1. He scolded House Republicans for passing a bill that would do exactly that by tying the interest rate to the 10-year Treasury bill—just as the President’s budget proposed. “I’m glad that the House is paying attention to it,” he said, “but they didn’t do it in the right way.” To be sure, there are important differences between the House bill and the proposal in the President’s budget... But the gap between the two sides is simply not that wide. It’s certainly not wide enough to warrant the veto threat the President issued before the House voted on the Republican proposal...."
  • Business Insider (June 6, 2013): Senate Fails To Pass Bills That Would Have Kept Student Loan Interest Rates From Doubling: "Interest rates on new student loans were heading higher after senators on Thursday failed to advance proposals to keep them from doubling come July 1. Dueling measures in the Senate would have kept interest rates on some student loans from moving from 3.4 percent to 6.8 percent, although the Republican and Democratic proposals failed to win 60 votes needed on to bring the measures to the floor. The failure means students are likely to face higher rates on new subsidized Stafford student loans this fall but enjoy greater certainty on interest they will be expected to pay of the life of their loans...”
  • Roll Call Newspaper (June 6, 2013): Senate Blocks Dueling Student Loan Bills: "At a press conference after the votes, Democratic leaders could not specify what they did not like about the Senate GOP alternative. Reid said that the White House would veto “the Republican bill,” which is only partially true. The administration said it would veto the House Republican bill, primarily on the grounds that the House bill would not lock in rates for the life of the loan. When pressed about the Senate GOP alternative, which does lock in rates, Reid said such a claim was Republican spin. It’s clear the two sides, at least on the Senate end of the Capitol, are closer than they appear on the issue. But again, Democrats think the student loan debate makes for good politics, so for now, conflating the two bills suits their purposes..."