Partisan bickering is dooming efforts to stop college student loan interest rates from doubling in about six weeks, even though members of both parties say they want to block the rate hike. Democrat Iowa Senator Tom Harkin says his bill that would freeze the interest rate is being filibustered by Republicans.
If they keep it up, Harkin says, 7-million college graduates, including 255,000 Iowans, will face much higher bills. “This rate hike looms especially large for Iowa,” Harkin says. “Nearly 72% of Iowa’s college graduates have student loan debt, the 4th highest percentage in the nation. Those borrowers are carrying an average of $30,000 in student loan debt, which is the 3rd highest level in the nation.”
Harkin says his bill is designed to eliminate the interest rate increase that’s scheduled to take effect on July 1st. The rate is currently 3.4%. Yesterday, the Senate voted on four different Republican budget plans, including the Ryan budget that passed in the House earlier this spring,” Harkin says. “All of those Republican budgets would permit the doubling of the student loan interest rate to 6.8%.”
If the rate increase goes into effect, students would be required to pay an average of $1,000 more per year of school, which Harkin says is not an option. “It’s time for Republicans to stop those crocodile tears, to end the filibuster, just end the filibuster so we can bring the bill up for a vote,” Harkin says.
“In today’s tough economy, it’s unacceptable to ask middle-class students and their families to shoulder sharply higher student loan interest payments.” Harkin says the cost of freezing the interest rate hike would be offset by “closing a tax loophole that benefits certain high-income professional service providers.”
Iowa’s other U-S Senator, Republican Chuck Grassley, says that’s the equivalent of a new tax, something he and the rest of the G.O.P. won’t support. Grassley says, “Democrats in the Senate want to pay for it with taxes and we Republicans want to take the money that’s a profit from direct loans from the federal government for students, which profit is used to finance health care, and take that money back and use it to keep interest rates low for students.”
On the flip side, Harkin accuses Republicans of wanting to eliminate a public health care fund in the new federal law which provides things like immunizations, mammograms and screenings for diabetes and cancer. Grassley counters that it’s a matter of not creating another tax and being judicious with the funds at hand.
“We think it’s wrong for students to have a profit on their student loans that the government uses for purposes other than education,” Grassley says. “We want to put it back into education. That’s the difference.” Harkin says student loan debt now exceeds one-trillion dollars and has surpassed total credit card debt for the first time.