Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
September 1, 2015

Democrats Grudgingly Accept Student Loan Deal, for Now

(Bill Clark/CQ Roll Call File Photo)

(Bill Clark/CQ Roll Call File Photo)

As the student loan endgame neared, Democrats grumbled about the budget rules that make the bipartisan package work.

With an extra push from the White House, however, the bill seemed on track for passage.

“We’re going to enjoy it now and pay later,” Rhode Island Democrat Jack Reed said, citing the Congressional Budget Office determination that the deal announced last week would backload higher interest rates in later years. “The cost of fixing it goes up with each year.”

This manner of accounting is nothing new. The formula used to calculate payments to doctors who treat Medicare patients always assumes a huge cut in payments to providers in future years, a budgeting debacle that’s come to be blocked through the stopgap known as the “doc fix.”

Reed said he planned to offer an amendment with Sen. Elizabeth Warren, D-Mass., to cap the rates for students at 6.8 percent, instead of allowing them to float higher, with no real anticipation of success.

Health, Education, Labor and Pensions Chairman Tom Harkin, D-Iowa, signed on to the bipartisan deal last week, thinking that the short-term benefits of lower federal student loan interest rates outweigh the longer-term implications. Asked about the “doc fix” comparison, Harkin said he would explore changes in the future.

“Any law’s subject to change; this one is too,” Harkin said. “We don’t know how it’s going to work in the future in terms of interest rates or what interest rates may be, all we have to go on is CBO estimates and we all have to play by these — this rule-book. That’s why I want to take another look at it in the higher education act next year. Let’s see where the economy’s headed, let’s see where the interest rates are headed.

“The most important thing in terms of student loans is what’s going to happen to the trillion dollars hanging over their heads right now,” Harkin said.

White House officials, up to and including President Barack Obama, have pushed for the student loan compromise hashed out among a bipartisan group of senators. Republicans have been vocal in their support.

“Democrats need to finally allow the bipartisan student loan reform proposal to come to a vote this week, so we can pass it and ensure there’s one less Washington-created problem for young people to worry about in this economy. Because it’s tough enough out there for them already,” Minority Leader Mitch McConnell, R-Ky., said Tuesday on the Senate floor.

Democrats opposing the deal have directed varying degrees of ire at the Obama administration.

The White House released a fact sheet Tuesday showing short-term benefits of the plan, saying: “Under the compromise plan, nearly 11 million borrowers will see their interest rates decrease on new loans after July 1, 2013.” Education Secretary Arne Duncan then participated in a conference call supporting the package.

“The White House is being disingenuous and is trying to sweep under the rug big increases in interest rates for students and parents in the near future,” Sen. Bernard Sanders, I-Vt., said in a statement. “Because college costs are out of control and interest rates are rising, students are leaving college deep in debt or in some cases choosing not to continue their education because they cannot afford it.”

But Sen. Richard Blumenthal, D-Conn., was more reserved.

“I think the White House has the right intentions and great motives. I simply disagree on the caps and other essential features,” Blumenthal said.

He announced his opposition to the agreement July 19, in part because of what he called “variable low teaser rates” in the near term.

Speaking with reporters after Tuesday’s Democratic caucus lunch, Majority Leader Harry Reid, D-Nev., said he believes a majority of Democrats will vote “yes” when the final passage vote comes up, without expanding on his thinking.

About an hour earlier, Harkin told a group of reporters outside the lunch that it was too early to predict a whip count.

“I don’t know how this is all going to filter out,” Harkin said. “I mean, some people may want to express themselves on an amendment … and once they’ve expressed themselves they may then vote for the compromise.”

Harkin encouraged his colleagues to realize that the lower interest rates in the short-term made the package worthy of support, with the Iowa lawmaker noting he often finds himself voting for deals he wouldn’t have designed.

“I mean, chairmen sometimes have to reach compromises. I did that in agriculture bills, I’ve done that in a lot of other bills. I don’t get what I want just because I’m chairman,” Harkin said.

Comments (24)

Leave a Comment

Your email address will not be published.

author email

  1. Stew Winkel

    July 23, 2013
    5:58 p.m.

    This is just sickening. Republicans won’t raise taxes on anything, but raise interest rates on students forced to take out loans, no problem. How disingenuous can McConnell be when he says let’s make things easier for students while at the same time forcing things to be more difficult in just a year or so. And democrats are just once again shockingly weak. The best this senate appears capable of is kicking problems down the road. They are simply the exact opposite of leadership.

    • zoobee

      July 24, 2013
      9:41 a.m.

      It was the College Cost Reduction Act of 2007 signed into law by President BUSH that lowered the interest rates through last year in the first place. It is the Democrats who insist on band aid fixes each year so that they can make it an issue the following year. Obama is the one who ended the subsidized loan program for graduate students, temporarily suspended grace period subsidies on undergraduate sub loans, and ended lender choice. It was Obama who did not fund the ACG or SMART Grant programs signed into law by Bush. It was Bush who signed into law the Income Based Repayment program, which Obama is trying to repackage as Pay As You Earn and take credit for, and it was Bush who signed into law the Public Service Loan forgiveness program. It is not Republicans who are the culprits here.

      And this plan is supporting by capital Democrat himself, Obama. It is the one thing he’s done in his entire presidency that I agree with. Band aid fixes are not stable for students. This package comes with a cap, so that you are ensured that the rates will not rise out of control even if the market does, and your rate is locked once your loan is originated. You want it lower because that is what it is right now, with no regard for what that will mean in the future for taxpayer cost, student affordability, or stability. That is irresponsible. This is a forward thinking bill that will have more long term benefits to a program that is unsustainable with constant band aid temporary “fixes”. It will save the subsidized loan program from future elimination.

  2. Stew Winkel

    July 23, 2013
    6 p.m.

    one other point – what rate did the banks get when bailed out by the federal government? the priorities of our government have become completely backwards.

  3. Anonymous

    July 25, 2015
    6:05 a.m.

    Hi my friend! I wish to say that this article is awesome, great written and come with almost all vital infos. I’d like to see more posts like this .

    http://www.sdorttuiiplmnr.com/

  4. Anonymous

    July 25, 2015
    8:07 a.m.

    Very interesting points you have observed, thankyou for putting up. “The unspoken word never does harm.” by Kossuth.

    http://www.sdorttuiiplmnr.com/

  5. Anonymous

    July 28, 2015
    4:51 p.m.

    Some truly nice and useful info on this web site, too I conceive the layout contains wonderful features.

    http://www.warriorforum.com/showthread.php?t=1094532

  6. Anonymous

    July 31, 2015
    11:15 a.m.

    Hello.This article was really remarkable, especially since I was investigating for thoughts on this issue last Tuesday.

    http://przedszkole-roza.pl/

  7. Anonymous

    July 31, 2015
    12:56 p.m.

    You are a very capable person!

    http://hotel-guitar.pl

  8. Anonymous

    Aug. 2, 2015
    12:23 p.m.

    There is clearly a lot to identify about this. I believe you made some good points in features also.

    http://www.consultdustry.com/associates-global-trade-and-international-business-development-agency/

  9. Anonymous

    Aug. 4, 2015
    9:52 p.m.

    I really appreciate this post. I have been looking all over for this! Thank goodness I found it on Bing. You have made my day! Thx again

    http://www.teenchoiceawards2015live.com/

  10. Anonymous

    Aug. 6, 2015
    10:51 a.m.

    I think other site proprietors should take this site as an model, very clean and magnificent user genial style and design, let alone the content. You are an expert in this topic!

    http://quotesautoinsurance.org/compare-auto-insurance-rates-by-zip-code.html

  11. Anonymous

    Aug. 7, 2015
    4:22 a.m.

    I conceive you have observed some very interesting points, regards for the post.

    http://quotesautoinsurance.org

  12. Anonymous

    Aug. 7, 2015
    6:11 a.m.

    I like the valuable information you provide in your articles. I will bookmark your blog and check again here regularly. I am quite sure I’ll learn many new stuff right here! Good luck for the next!

    http://quotesautoinsurance.org

  13. Anonymous

    Aug. 7, 2015
    1:09 p.m.

    Thank you a lot for giving everyone an extremely wonderful chance to read articles and blog posts from this website. It’s always very pleasing plus packed with a lot of fun for me personally and my office colleagues to search your blog at the very least 3 times a week to read the new issues you have got. And definitely, I’m so always impressed with all the unbelievable ideas you serve. Certain 3 facts in this posting are absolutely the very best we have ever had.

    http://curiousamerica.com/online-auto-insurance-quotes

  14. Anonymous

    Aug. 10, 2015
    2:44 a.m.

    Spot on with this write-up, I truly suppose this website wants much more consideration. I’ll most likely be again to read rather more, thanks for that info.

    http://dnvappliance.com/range-repair-orange-county

  15. Anonymous

    Aug. 10, 2015
    12:39 p.m.

    The following time I learn a blog, I hope that it doesnt disappoint me as much as this one. I mean, I know it was my choice to learn, but I actually thought youd have something attention-grabbing to say. All I hear is a bunch of whining about something that you can fix for those who werent too busy on the lookout for attention.

    http://www.thewalkingdeadseason6live.com/

  16. Anonymous

    Aug. 11, 2015
    1:07 p.m.

    Hey There. I found your weblog the use of msn. That is an extremely smartly written article. I will be sure to bookmark it and return to read extra of your useful information. Thank you for the post. I’ll certainly return.

    http://refrigerator-repair-oc.com/kenmore-refrigerator-repair/

  17. Anonymous

    Aug. 17, 2015
    9:49 p.m.

    Throughout the awesome pattern of things you actually get an A+ for effort and hard work. Where you confused me personally was first in the specifics. As it is said, details make or break the argument.. And that couldn’t be more true right here. Having said that, permit me tell you exactly what did give good results. Your writing is certainly pretty engaging which is most likely the reason why I am taking an effort in order to comment. I do not really make it a regular habit of doing that. Next, even though I can notice the jumps in logic you make, I am definitely not confident of how you appear to connect your points which in turn produce your final result. For now I will yield to your position but trust in the near future you link your facts better.

    http://expertadvantagesocial.com/profiles/blogs/best-option-for-charlotte-jewelry-store

  18. Anonymous

    Aug. 18, 2015
    12:06 a.m.

    I always was concerned in this topic and stock still am, thanks for posting.

    http://archiesocial.herobo.com/index.php?p=blogs/viewstory/49600

  19. Anonymous

    Aug. 23, 2015
    8:15 p.m.

    Some genuinely excellent information, Gladiola I observed this. “If you haven’t forgiven yourself something, how can you forgive others” by Dolores Huerta.

    http://www.superbowl.com.tw

  20. Anonymous

    Aug. 24, 2015
    3:15 a.m.

    Whats up very nice blog!! Guy .. Beautiful .. Wonderful .. I will bookmark your website and take the feeds also…I’m glad to find so many helpful info here in the post, we want work out extra techniques in this regard, thanks for sharing.

    http://homeownersinsurancem.com/geico-insurance-quotes.html

  21. Anonymous

    Aug. 26, 2015
    2:08 a.m.

    It’s onerous to find educated individuals on this topic, however you sound like you recognize what you’re speaking about! Thanks

    http://topcheapinsurance.com/travelers-home-and-auto-insurance.html

  22. Anonymous

    Aug. 26, 2015
    9:37 a.m.

    Some truly nice stuff on this site, I like it.

    http://quotesautoinsurance.org/pemco-insurance.html

  23. Anonymous

    Aug. 29, 2015
    7:28 p.m.

    Wow, wonderful weblog layout! How long have you ever been running a blog for? you make blogging look easy. The total glance of your site is wonderful, let alone the content material!

    https://issuu.com/quelquesminute11

Sign In

Forgot password?

Or

Subscribe

Receive daily coverage of the people, politics and personality of Capitol Hill.

Subscription | Free Trial

Logging you in. One moment, please...