Today, the House voted on the anti-student student loan "compromise" legislation that the Senate passed a week ago.
Forget what the bill did? Here's a reminder (from my diary last week):
What does the "compromise" bill do?
Under the agreement, federal student loans will be calculated and fixed to the interest rates on the 10-year Treasury bill. Undergraduates will pay an additional 2.05% with an 8.25% interest rate cap; graduate students will pay an additional 3.6% with a 9.5% interest rate cap; and PLUS loans, which mainly affect parents of college students, will have an additional 4.6% with a 10.5% interest rate cap.
The New York Times editorial board came out against the bill this morning:
During the last decade, Congress sensibly replaced a system of variable-rate loans with fixed rates that allowed families to know what their loans would cost. It set the rate on both subsidized and unsubsidized loans at 6.8 percent, but later ordered the rate on subsidized loans — two-thirds of which go to families with incomes under $50,000 — to gradually decline by half. The refusal of Republicans in both houses to renew the lower rate means that students who start college this fall and finish in four years will be saddled, on average, with an extra $4,000 in debt.However, the New York Times editorial board did endorse the amendment put forth by Jack Reed and Elizabeth Warren to cap most loans at a rate of 6.8%.
This increase in costs comes at a time when college debt has already reached record levels, damaging the economy and hobbling young graduates. It also draws attention to the fact that the federal government is making quite a lot of money from the loan program. An analysis by the Congressional Budget Office estimated that the new, higher rate would earn the government about $184 billion over the next decade, after taking into account program costs, including potential defaults. Ms. Warren and other lawmakers describe this pile of money as “profit.” The Obama administration disputes this. But if it is not profit, what is it?
The government should not be making money off the backs of struggling student borrowers. In the long term, the loan program needs to be restructured so that the loans are closely linked to the government’s actual cost of borrowing, which could reduce rates for students.
A Senate compromise bill that is supposed to address the harmful rate increase falls well short. The bill, supported by the White House, would temporarily lower interest rates, while raising rates in future years to make up for lost federal revenue. (Under interest rate caps included in the bill, rates on undergraduate loans in future years could rise as high as 8.25 percent.) Ms. Warren got it exactly right when she said the bill pits students against one another, requiring future college students to pay for the financial break enjoyed by students who precede them. “I think this whole system stinks,” she said, summing it up.
The Senate bill should pass only if it includes a provision, offered by Ms. Warren and Senator Jack Reed, a Democrat of Rhode Island, that would cap most loans at the rate of 6.8 percent. If Republicans resist that, the Senate should leave the loan rate exactly where it is. Congress should not make matters worse than they already are.----
The Senate killed the Warren-Reed amendment to impose a tighter cap and the Sanders amendment to sunset the bill in two years.
In simpler terms, the final "compromise" bill saves money for today's students at the expense of future students.
Now, let's move over to the House.
The House passed this "compromise" bill (deceptively titled the Smarter Solutions for Students Act) by a vote of 392 to 31. All but 6 Republicans and all but 25 Democrats voted for it.
Here are the 25 representatives whom you should thank for standing up for students.
Karen Bass (CA-37)
Mike Capuano (MA-07)
Judy Chu (CA-27)
Yvette Clarke (NY-09)
John Conyers (MI-13)
Keith Ellison (MN-05)
Marcia Fudge (OH-11)
Gene Green (TX-29)
Raul Grijalva (AZ-03)
Mike Honda (CA-17)
Ron Kind (WI-03)
Barbara Lee (CA-13)
Ben Luján (NM-03)
Stephen Lynch (MA-08)
Jim McGovern (MA-02)
Frank Pallone (NJ-06)
Donald Payne (NJ-10)
Mark Pocan (WI-02)
Cedric Richmond (LA-02)
Jan Schakowsky (IL-09)
Jackie Speier (CA-14)
Mark Takano (CA-41)
John Tierney (MA-06)
Niki Tsongas (MA-03)
Pete Welch (VT-AL)
Holt, Horsford, McCarthy (NY), and Rush were not there. Every other Democrat voted YEA.
During his Geek Out session last night, Rush Holt said that, were he in the Senate, he would have voted against the student loan bill along with the other liberal senators. I would expect he would have been a "NAY" had he been in attendance. He was likely in NJ campaigning for the Senate race.