05.08.12

Leahy Urges End Of Filibuster Of Bill To Avert Doubling Of Student Loan Rates

As Submitted To The Congressional Record

WASHINGTON (TUESDAY, May 8) -- The U.S. Senate Tuesday failed in the first attempt to end the filibuster that is preventing debate and votes on a bill to head off a sharp interest rate hike in federally subsidized Stafford student loans that is looming for 20,000 Vermont students on July 1.  A bill cosponsored by U.S. Senator Patrick Leahy (D-Vt.) – the “Stop Student Loan Interest Rate Hike Act” – would keep the Stafford loan interest rates nationwide from doubling to 6.8 percent, from the current rate of 3.4 percent.  In a vote of 52 to 45 Tuesday afternoon, Leahy and other proponents of the bill fell short of the supermajority of 60 votes needed to end a Republican-led filibuster of the motion to allow debate on the bill.  The path forward for the bill is uncertain, but discussion of the issue is continuing on the Senate Floor.  Following is Leahy’s statement about the Senate filibuster:

Statement Of Senator Patrick Leahy (D-Vt.)

On The “Stop The Student Loan Interest Rate Hike” Act

Congressional Record

May 8, 2012

Mr. LEAHY.  Today the Senate will vote on a vital piece of legislation that I am proud to cosponsor, to prevent the rise in interest rates on need-based student loans.  Without action, millions of students across the country will see their interest rates double on their subsidized Stafford Loans on July 1.  At the very least, these students deserve a debate on this vital pocketbook question that affects millions of young Americans and their families. 

I have always strongly believed in the importance of a college education.  I was the first in my family to have the opportunity to go to college.  Every young person should have the chance to pursue higher education.  Education is a path out of poverty, a road to personal growth and an access ramp to professional accomplishment and economic security.  Everyone wins when access to education expands.

It should go without saying that student loan costs should not rise so high that students cannot repay.  Yet in recent years, average college tuition rates have increased faster than inflation, far outpacing student financial aid.  Since 1985, the cost of attending college has increased by 559 percent, and last school year alone, in-state tuition and fees at public four-year institutions averaged 8.3 percent higher than the previous year.

I hear from Vermonters constantly about their struggles to afford college, and their concerns about student loan debt after they graduate.  Skyrocketing tuition is making it increasingly difficult for families to afford higher education.  Many students are forced to take on significant debt, and too often are not able to complete college because of soaring costs.  For those students who do go on to graduate, record student loan debt has made getting ahead in today’s job market next to impossible for many students.  Unfortunately, along with the pressure from student loan debt has come an increase in default rates among borrowers, which will affect a student’s financial stability for decades.     

Especially during these difficult economic times we need to be doing more to address the rising costs of higher education and the growing need for student financial aid.  We have made significant investments in higher education and making college more affordable in recent years through historic investments in the Pell Grant program, moving to a universal system of direct loans, and through the President’s recent executive order to reduce monthly payments for low income borrowers.  While these measures have certainly helped students, more must be done to ensure every American has access to a college education. 

While there is agreement on the need to prevent the interest rate increase, division remains on the way to finance the yearlong extension.  The House passed a bill largely along partisan lines that would fund the student loan measure by eliminating the Prevention and Public Health Fund, created under the Affordable Care Act.  Prevention funding is vitally important in helping to lower health care costs and improving the health of Americans through chronic disease screenings, tobacco education, and immunization programs.  An estimated fifteen percent of college seniors have chronic diseases and could benefit from this funding.  We should not force on students a choice made by Congress, not by students, between disease prevention and lower interest rates. 

 

The solution we offer is far better for students and for the Nation.  The bill to which I hope we proceed today would prevent student loan interest rates from doubling by closing a loophole in the tax code.  Right now, certain businesses can avoid paying employment taxes on their employees’ paychecks.  This measure would ensure that businesses employing individuals making over $250,000 would be subject to the same Medicare and Social Security taxes every business must pay.  This is a common sense reform that we should all support.   

 

Each opportunity for a young American to earn a college education is also an opportunity for the Nation’s future.  Our country’s ability to compete in the global marketplace in the future depends on our children’s ability to finance their education.  This does not need to be a partisan issue and should be one where we can find widespread agreement.

We must not tell the 7.4 million students who rely on subsidized Stafford Loans that their interest rates will double because protecting a tax loophole is more important than their ability to afford college.  I urge every Senator to help us move ahead today to support our students, their futures, and our country’s future.

 

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