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House Approves Plan to Cut Student Loan Rates

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House Approves Plan to Cut Student Loan Rates

House Approves Plan to Cut Student Loan Rates

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From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.


And I'm Melissa Block.

The House of Representatives was set today to approve a bill to cut student loan interest rates in half over the next five years. The measure is part of the Democrats' quick march on legislation during their first hundred hours in the majority, and it had bipartisan support.

As NPR's Andrea Seabrook reports, the measure also revealed some role reversals among House leaders.

ANDREA SEABROOK: If you've been paying attention to Congress in the past few years, you probably know two things - Democrats have not had much power in the minority, and Republicans have used a budgeting technique called a sunset to make something look like it costs less than it does.

Well, today, the two parties swapped roles. First, Republicans are too weak to swim against the tide of bills that Democrats are bringing to the floor under what are called closed rules. That means Republicans can't even offer amendments on these bills, which irks Georgia Republican Phil Gingrey.

PHIL GINGREY: This very important subject, to try to help low-income students afford a college education. there is a closed rule, immediately doing the things that you railed against us about.

SEABROOK: The Democrats' bill would reduce interest rates on college loans for low- and middle-income students by stepping them down slowly from 6.8 percent now, to 3.4 percent in five years. And then, six months after the loans hit the lowest rate, poof, the whole bill sunsets, and rates go back to 6.8 percent.

Now, no one thinks that's actually going to happen, but it will require a further act of Congress to do anything else. The sunset serves to make the bill look cheaper over the long haul, a tactic Republicans used many times on big tax cuts. One difference, though, Democrats have cut out subsidies for private banks and others to pay for the student loan rate drops, so it will not add to do the federal deficit.

And there's a lot of support for it. Florida Democrat Debbie Wasserman-Schultz says students may choose a school they like better because they'll be able to afford the payments, or the lower rates may help students choose better careers. For example, Wasserman-Schultz said, today, the country has a tremendous need for nurses and teachers.

DEBBIE WASSERMAN SCHULTZ: Their ability to decide to take that public service job as opposed to a job that, you know, you may not want, but is going to pay you more money so that you can handle your student loans - that's a big deal for American society.

SEABROOK: California Democrat Linda Sanchez says the lower rates will especially help immigrants.

LINDA SANCHEZ: (Speaking in foreign language)

SEABROOK: Today is a tremendous day for those who believe in the American dream, Sanchez said, before a Spanish language television camera. Both of Sanchez's parents are Mexican immigrants who came to the U.S. with very little, and then raised seven children.

SANCHEZ: All of us, through hard work, their sacrifice, a little bit of luck and definitely, through the affordability of college through student loans, graduated from college. So the seven of us are college graduates, and not many families can boast of that, plus two of us are members of Congress.

SEABROOK: Republicans argue that cutting interest rates would only help future college graduates, not people who'd like to go to college and can't afford it. Florida Congressman Ric Keller said the money should have gone to upfront tuition payments called Pell Grants instead.

RIC KELLER: We should have helped people with this $6 billion on the front end, with increased Pell Grants going to college, rather than helping college graduates on the back end.

SEABROOK: But Keller also expressed another common sentiment among Republicans.

KELLER: I'm not here to make fun of the proposal the Democrats have come forward with. I'm going to vote for it.

SEABROOK: Showing that Democrats are managing another political role reversal, bringing bills to the floor that Republicans don't like, but have trouble voting against.

Andrea Seabrook, NPR News, the Capitol.

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