Sen. Lamar Alexander (R-Tenn.), introducing the bill on the Senate floor, noted that the Congressional Research Service found that the average benefit to students who get the lower rate is about $7 a month, and will cost taxpayers about $6 billion.
It would only affect new, subsidized Stafford loans.
“All this talk is about offering students the benefit of about $7 a month for new loans,” Alexander said. “It is important to notice that no student who has a 3.4-percent loan today will see his or her interest rate go up.”
Still, he said he was glad the president was bringing the student-loan issue to light so that Republicans can show how congressional Democrats “are actually overcharging students — all students — on student loans and using some of the money to pay for the health care law.”
“The Congressional Budget Office said when the new health care law passed, Congress took $61 billion of so-called savings — I call them profits on student loans — and it spent $10 billion to reduce the debt, $8.7 billion on the health care law, and the rest on Pell grants,” he said.
Alexander stressed that both sides of the aisle, Obama and Mitt Romney included, want to see student-loan rates remain low, but differ on how to pay for the extension.
“Our friends on the Democratic side have come up with their usual methods of paying for it: They are going to raise taxes on small business and people who create jobs,” the senator said. “We have a little better idea on this side, which is, let’s take the $8.7 billion back that the Federal Government overcharges students on student loans today to help pay for the health care law and give it back to the students, and let’s extend this for one year. That will leave nearly $3 billion extra, which we can use to shore up the Pell grant funding gap that is expected over the next couple of years.”
“Respectfully, I say to President Obama, when you visit the next college campus, tell the whole story,” Alexander added.
On Air Force One en route to Iowa today, White House press secretary Jay Carney was asked by a reporter if Democrats bear just as much responsibility to extend the rates, since it was that side of that aisle that built in the expiration date in the first place.
Carney said that he’d seen “a bit of the dam breaking in the last few days,” but the Republicans were still the major block.
“I saw some stray remark yesterday about someone suggesting that — a Republican suggesting that the president should stop talking about the student loan issue and focus instead on the economy,” Carney said. “And I was just stunned by how narrow-minded those remarks were because this is absolutely about our economy.”
The conservative Republican Study Committee released a fact sheet on student-loan rates today accusing the Obama administration of exacerbating the tough times for students, who are borrowing twice what they did just a decade ago.
“Government subsidized loans have helped fuel skyrocketing college tuition costs – much like Fannie Mae, Freddie Mac, and the housing bubble – leading many young people who now cannot find jobs to borrow even more money to complete their education,” the RSC said.
“Americans now have more student loan debt than credit card debt. What these folks don’t have are jobs.”