Washington, D.C. – Students need a permanent fix for college loan interest rates and not a short-term fix that holds them hostage a year at a time. That was the message U.S. Senator Mike Enzi, R-Wyo., gave during a speech on the Senate floor today. The Senate majority continues to push for a student loan interest rate plan that kicks the can down the road in place of a permanent solution and ignores 60 percent of students with new loans.
The Senate majority’s short-term fix would save 40 percent of students just $6 a month on new loans by speeding up taxes on working-age folks who inherit money from their deceased loved one’s retirement account.
A section of the president’s health care law eliminated private banks from competing for student loans and locked in a higher interest rate. The money the federal government gets from overcharging students goes in part to help pay for the health care law, not to students for their education, according to Enzi.
“The federal government decided that a way we could fund health care in this country would be to take over the student loan industry and raise the rates to 6.88% which provides money for the Affordable Care Act,” said Enzi.
The Senate majority leader changed his vote to a “no” so that “he can bring the failed student loan bill up again without having to consider an alternative.” Enzi believes it’s so the Republicans can be blamed one more time.
“It’s pretty clever. By bringing up this bill by itself and having it defeated on a procedural motion, it solves two problems. One, you can blame Republicans. Two, the money will still be there for the Affordable Care Act. That’s keeping the money and blaming the Republicans. How can it get better than that? Well, it can get better than that if we solve it for all of the kids applying for loans this year, not just 40 percent of them. And solve it so they know exactly where the interest rate is going to be at the time they apply and have it stay that way through the whole time they have the loan,” said Enzi. “This isn’t supposed to be a blame game around here. It’s supposed to be about finding some common ground and getting things done.”
In June, Senator Enzi voted for a long-term market-based solution that mirrored the plan President Obama offered. It would have permanently fixed the interest rate for 100 percent of students taking out new loans. Enzi believes that a permanent solution is needed and plans for a one-year extension are part of the problem in Washington.