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Senate turns to partisan fight over student loan

By Alan Fram

Associated Press

POSTED:
LAST UPDATED: 05:27 a.m. HST, May 07, 2012


WASHINGTON >> The Senate is the newest arena in the election-year face-off over federal student loans, and both sides are starting out by pounding away at each other.

With Congress returning from a weeklong spring recess, the Senate plans to vote Tuesday on whether to start debating a Democratic plan to keep college loan interest rates for 7.4 million students from doubling on July 1. The $6 billion measure would be paid for by collecting more Social Security and Medicare payroll taxes from high-earning owners of some privately held corporations.

Republicans want a vote on their own bill, which like the Democrats' would freeze today's 3.4 percent interest rates on subsidized Stafford loans for one more year. It would be financed by eliminating a preventive health program established by President Barack Obama's health care overhaul.

Each side scoffs that the other's proposal is unacceptable, and neither is expected to garner the votes needed to prevail. Even so, everyone expects a bipartisan deal before July 1 because no one wants students' interest rates to balloon before November's presidential and congressional elections.

"We're still pushing on that," said Rhode Island Sen. Jack Reed, chief sponsor of the Democratic bill. "But I also think I recognize if there is another proposal outside of going after the health care fund, we'll certainly listen."

Stafford loans are made to low- and middle-income students. With student loans of all types a growing household burden that now exceeds the nation's credit-card debt, the fight in Congress has come to symbolize how each party would help families cope with the rugged economy and how to pay for it.

Lawmakers face a pile of other issues this week as well.

On Tuesday, the House Judiciary Committee plans to vote on GOP-written legislation renewing federal efforts to prevent domestic violence. The Senate voted to renew the Violence Against Women Act two weeks ago and included provisions, such as requiring groups receiving money to show they don't discriminate against gays, that drew opposition from conservatives. The House version is expected to leave out such contentious language.

That same day, House-Senate bargainers plan to start talks on overhauling federal transportation programs. Congress is under pressure to act because the trust fund that pays for highway aid to states is forecast to go broke next year. Transportation programs have limped along under nine short-term extensions since the last long-term transportation bill expired in 2009, and the current one expires June 30.

The House Armed Services Committee plans Wednesday votes on a defense budget that may defy administration preferences to close more military bases and retire some of the Air Force's high-altitude Global Hawk drones.

The House also turns this week to a Republican measure cutting more than $300 billion from the federal budget over the coming decade. The cuts would prevent the Pentagon from getting smacked with a $55 billion cut in its budget next year, due to the failure of last year's deficit "supercommittee" to strike a debt-cutting deal. They would also preserve $24 billion for domestic agency budgets.

The GOP cuts hit programs for the poor such as food stamps and Medicaid, and also strike at Obama's revamping of health care and financial regulations. They'll be dead on arrival in the Democratic-controlled Senate.

The House also is set to vote on renewing the charter of the Export-Import Bank, the federal agency founded in 1934 that helps finance American companies' overseas sales. House leaders late Friday broke a political logjam that had been holding up the charter renewal, something usually accomplished with little or no controversy.

As for the student loan fight, it is chiefly an exercise each party is using to vilify the other to voters, as Obama illustrated Friday in remarks to a cheering crowd at a high school in Arlington, Va.

"We shouldn't have to choose between women having preventive health care and young people keeping their student loan rates low," he said, continuing a Democratic theme that the GOP doesn't care about women's issues.

This week's White House schedule underscored the president's willingness to use student loans as a blunt political instrument. He planned a Monday conference call on the subject with local officials and student leaders, Vice President Joe Biden was discussing it Thursday at the White House with students and others, and top administration officials were holding student loan events in at least nine states.

Republicans were giving as well as they got.

In a written statement, Senate Minority Mitch McConnell, R-Ky., said the student loan issue was a phony fight designed by Democrats as a distraction for young people who "can't find good jobs in the Obama economy." Others also called it a charade.

"It seems like once a week, they begin the week by turning the Senate into a political playpen for the presidential race," Sen. Lamar Alexander, R-Tenn., sponsor of the GOP student loan measure, said in an interview. He added, "I certainly don't support the idea of raising taxes on small business men and women at a time when we're trying to grow jobs."

On April 27, the House approved a student loan measure similar to the one by Senate Republicans. House leaders scheduled that vote soon after Mitt Romney, the likely GOP presidential nominee, built pressure on them by saying he favored extending the current loan interest rates.

If the loan rates rise to 6.8 percent on July 1, it would affect more than 7.4 million students expected to seek subsidized Stafford loans in the year running through June 2013. The Department of Education projects those students will borrow $31.6 billion, averaging $4,226 apiece.







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Ronin006 wrote:
I don't get it. Why is this being called a student LOAN program when it is being funding by taxpayers? Shouldn't the students who receive loans pay off the loans after they graduate? It appears to be just another entitlement program which we cannot afford.
on May 7,2012 | 06:09AM
OldDiver wrote:
The loans are being paid back. It issue is the President took out the middle men (The Banks) and cut student loan rates in half. Republicans wanted to then raise the student loan rates to pay for extending tax cuts for the rich. That didn't fly with the public. Republicans are now trying to gut Obamacare. This is all about Republicans looking to extend tax cuts for the rich.
on May 7,2012 | 08:31AM
stanislous wrote:
Republicans can propose all the legislation that like, but the Democrat controlled Senate will never bring it to a vote. And even if by chance it did pass the President would veto it. And there are not enough Republican votes to over ride any of Obamas veto. The Democrats constructed the "Student Loan" legislation several years ago so it would come due this year before the election. Just another way to make the Republicans look like the bad guys. Don't worry anyone, The Democrat version of the student loan legislation will pass. Smart move Democrats.
on May 7,2012 | 07:05AM
OldDiver wrote:
You are correct that President Obama took out the middle men( The Banks) and reduced the rate on student loans. Democrats want to continue the lower rates for student loans. Republicans are looking for was to finance extending tax cuts for the rich. Raising student loans rate was one way. They are now threatening Obamacare as a way to make a better deal to force President Obama to extend tax cuts for the rich.
on May 7,2012 | 08:36AM
Anonymous wrote:
President Obama didn't even bother to vote in favor of the program you're deceitfully trying to imply was crafted by him, one of only 4 senators to not cast a vote. He wasn't one of the many cosponsors either. Nice try though. As far as extending the reduced loan rates, the argument is over how to pay for them, not whether to extend them. Obama wants to raise taxes and the republicans want to use money Obama is planning to put towards his health care plan that is turning out to be a lot more expensive than he promised if it's even Constitutional, which there is great doubt about if you have been reading up on the matter lately. It's like wanting to put in a pool and not having the money, then arguing over whether it's going to come from.
on May 7,2012 | 09:34AM
OldDiver wrote:
President Obama vote? Obama made the change while we was President.
on May 7,2012 | 10:04AM
McB0B wrote:
I hope you're sitting down because the rate cuts in question, which will sunset unless renewed, were enacted in 2007 and signed into law by George W. Bush. Obama could have been a Senate co-sponsor but chose not to, or he could have at least voted for them but he didn't do that either. Research it yourself. It's easier to find facts than it is to make them up. Give it a try.
on May 7,2012 | 02:53PM
star08 wrote:
Why are we charging students 6.8% on loans? The cost of money is zero! How can an education be seen as an investment in the future of our children when the USGovt is charging 6.8% to make that investment in a zero percent cost of money environment?
on May 7,2012 | 08:59AM
OldDiver wrote:
Republicans want the student loan rate to double to pay to extend the tax cuts for the rich.
on May 7,2012 | 10:05AM
soshaljustic wrote:
"As for the student loan fight, it is chiefly an exercise each party is using to vilify the other to voters, as Obama illustrated Friday in remarks to a cheering crowd at a high school in Arlington, Va. "We shouldn't have to choose between women having preventive health care and young people keeping their student loan rates low," he said, continuing a Democratic theme that the GOP doesn't care about women's issues." Don't forget the transportation issues, that have now forced the elder community and people with disabilities to stay shut in or drag ourselves along the street to get safe transportation or give up our Civil Rights and now the funding is at threat to end again? Just nutsy cuckoo.
on May 7,2012 | 09:25AM
entrkn wrote:
the gop works for the shyster banks and the dems work for the rest of us...
on May 7,2012 | 11:45AM
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