[Vision2020] House OKs Rate Cut for School Loans

[Tom Hansen]

>From Today's (January 18, 2007) -

"'This is only the beginning,' said Rep. George Miller, D-Calif., chairman
of the House Education and Labor Committee. 'This is a down payment.'"

Representative Bill Sali, who continues to be inaccessible to the citizens
of Idaho from his website at http://sali.house.gov/, voted against this
bill.

-----------------------------------------------------------------

House OKs rate cut for school loans

Johanna Neuman 
Los Angeles Times
January 18, 2007

WASHINGTON - With fanfare and substantial bipartisan support, the House
delivered Wednesday on the fifth of six bills Democrats had vowed to quickly
pass, voting overwhelmingly to cut the interest rate on some college student
loans.

The bill, however, was much scaled back from House Speaker Nancy Pelosi's
campaign promise to cut all student loan interest rates in half.

Instead, the House measure, passed 356-71, applies to the 5.5 million
subsidized Stafford loans for students whose families earn between $26,000
and $68,000 a year; it would not increase Pell Grants or student tax credits
as originally considered. The bill sets a five-year phase-in of the interest
rate reduction from 6.8 percent to 3.4 percent, then returns the rate to the
original percentage after six months.

House Democrats called it a "first step" on delivering some relief to
students and their parents as college costs have skyrocketed 41 percent in
public universities and 17 percent in private ones, and after college debt
doubled between 1993 and 2004, according to the independent U.S. Public
Interest Research Group.

"This is only the beginning," said Rep. George Miller, D-Calif., chairman of
the House Education and Labor Committee. "This is a down payment."

The bill faces an uncertain future.

In the Senate, Sen. Edward M. Kennedy, D-Mass., chairman of the education
committee, is considering a broader bill that would increase grants and tax
credits.

The Bush administration questioned the wisdom of encouraging more loans
rather than grants. "Student debt loads have soared in recent years, and it
is not clear that encouraging more loans is a wise course. Instead, the
administration would support efforts to direct savings to additional grant
support for low-income students," said a statement issued by the Office of
Management and Budget.

Eager to keep their pledge to voters to pass long-stalled legislation in
their first 100 legislative hours, House Democrats have sailed through four
other bills: implementation of the 9/11 Commission recommendations, an
increase in the minimum wage, support for embryonic stem cell research and a
plan to lower Medicare's prescription drug prices.

Today, the House is expected to finish its juggernaut with a bill to roll
back tax credits and other breaks for oil companies valued at $14 billion
over 10 years.

But the student loan bill required some deft maneuvering. Miller laid aside
the original plan, which would have cost an estimated $45 billion, in favor
of the slimmed, phased-in approach, whose $5.8 billion costs would be offset
by cutting payments to lenders and guarantee agents.

Miller pledged that, later in this Congress, Democrats would find ways to
increase Pell Grants, to make tax credits easier to understand and to press
colleges and universities to "do their part" in holding down costs.

Critics said the measure was the first casualty of the Democrats' own
"pay-as-you-go" rule, requiring them to find ways to pay for bills that
increase government spending.

Rep. Virginia Foxx, R-N.C., a former college administrator who said she took
seven years to work her way through college, said, "All they are doing is
inviting colleges to increase tuition and fees. It's very cynical."

Republicans alleged Democrats were rushing to the floor - without benefit of
vetting by committees - a bill that would give them a "pyrrhic victory"
during the 110th Congress' first 100 hours but would do little to lower
college costs. Democrats replied that they hoped to extend the lower loan
rate beyond the five-year window in later legislation.

Lenders bemoaned the Democrats' tactic of paying for the bill by passing the
higher costs to them. 

But student-loan advocates were jubilant. "Twelve months ago, Congress was
putting the finishing touches on a $12 billion cut to student loan
programs," said Luke Swarthout, higher-education lobbyist for the Public
Interest Research Group. "Now we're talking about real policy to make
college more affordable for millions of students. This is the right
conversation to be having."

-----------------------------------------------------------------

Seeya round town, Moscow.

Tom Hansen
Moscow, Idaho

"Forty percent of the mass of every tree in the forest is crude oil.  Stop
and think about that.  We call them fossil fuels because they used to be
live stuff . . . now in the ground is turned into crude oil." 

- Bill Sali (September 21, 2006)