Student Loan Scam
House Democrats were extolling their student loan bill for opening college to Americans with moderate incomes on Wednesday when Rep. Tom Price, a second-term Republican from Georgia, took the floor. "If only this bill did what they say," Price declared. His admonition constituted more than the usual hyperbole of congressional debate.
The bill, passed by an overwhelming, bipartisan vote, was touted as reducing the interest on federally subsidized student loans, from the present 6.8 percent to 3.4 percent. Actually, it gradually reaches the 3.4 percent level on July 1, 2011. A student taking out a loan on July 1 of this year would pay 6.12 percent after graduation. Only 29 percent of all students getting loans would be eligible for this gradual reduction. Other student loan programs will be cut to help cover the $7 billion cost over five years. And contrary to what the Democrats suggest, the bill does nothing to slow skyrocketing college tuition.
Such details are obscured, however, by the brilliant success of Speaker Nancy Pelosi's "first 100 hours." The student loan bill is one of the politically popular measures rushed through the opening days of the first Democratic-controlled House session in 12 years -- without hearings, without committee authorization and without meaningful debate. While Democratic support has been unanimous, Republicans are divided and listless.
In contrast to the ideologically diverse Democrats who controlled Congress in the past, today's House majority members are like automatons. The hand of Rep. Rahm Emanuel, chairman of the House Democratic Caucus, was apparent as Democrats newly elected under his leadership took the floor to deliver nearly identical speeches of how this bill will help poor students.
Rep. Ed Perlmutter, who won a previously Republican-held district in Colorado, used the now common anonymous anecdote in his floor speech. He told of seeing "a woman whose kids have gone to school with mine" at a swim meet in Arvada, Colo. "She told me that one of her kids is in college now, and she has another that will be going in a couple of years. She is a single mom, and her kids have done well in school, but the cost of college has become prohibitive for their entire family. She said her kids have been excellent students, but she was fearful they could not get into college and be able to pay for it."
Perlmutter added that this "single mom" thanked him for this bill changing "the cost of higher education." In fact, the bill has nothing to do with the prohibitive cost of college. It will have no effect whatsoever on her child now in college. If her second child is literally enrolling in a couple of years (in January 2009), the interest rate would be 4.76 percent, to be paid after the student leaves college. The mom may have thanked Perlmutter too soon.
Because Democrats are now committed to "pay-go" (offsetting all spending increases), this bill means cutting $6 billion from other federally subsidized student loan programs, on top of a net $12 billion cut by the last Republican-controlled Congress.
On the eve of Wednesday's debate, the Consumer Bankers Association and the Financial Services Roundtable sent a joint letter to members of Congress. The offset cuts in loan funding, the organizations warned, "cannot be absorbed by the nation's loan providers without compromising the kinds of benefits and services now provided to college students and their families."
This warning was not expected to effect heady Democrats, but it should have promoted caution among Republicans. It did not. While Democrats were 232 to 0 for the bill, only 71 Republicans followed their leadership and voted against it. The 124 Republicans voting aye included such erstwhile conservative stalwarts as Todd Akin (Mo.), Virgil Goode (Va.), Chip Pickering (Miss.), Joe Pitts (Pa.), Dana Rohrabacher (Calif.), Ed Royce (Calif.) and Todd Tiahrt (Kan.).
The once militant, united House Republicans are demoralized and on the run. They were battered in the last campaign for cutting school loans in the previous Congress and are willing to go along with a sham bill, hoping for Senate gridlock or a presidential veto.
© 2007 Creators Syndicate Inc.