Rancorous House Backs Student Loan Bill

Lawmakers vote overwhelmingly to cut interest rate in half by 2011, but Republicans and Democrats spar over tactics and history. 
January 18, 2007

Anyone who held out hope that the dawn of a new Congress would somehow elevate the rhetoric about higher education issues on Capitol Hill had them dashed Wednesday. That, more than anything else, became clear as the House of Representatives debated and ultimately passed legislation that would cut the interest rate on some student loans in half over five years.

Perhaps because they did not relish explaining a No vote to their constituents, 124 Republicans joined a virtually unanimous block of Democrats to pass the bill by a margin of 356 to 71, giving the new party in power an early legislative victory in its push to pass several key pieces of middle-class-friendly legislation in the new Congress's first 100 hours of work.

But lawmakers from the two parties spent most of the three-plus hours of debate trading charges and countercharges about who did (or didn't do) what in the previous Congress, a return to the endless partisan skirmishing that made debate over the Higher Education Act in 2005 and 2006 frequently mind-numbing and difficult to endure.

GOP lawmakers blasted the Democrats for quashing debate about the legislation and attacked the measure itself for doing little to help current students, especially financially needy ones. Democrats retorted with cries of hypocrisy, noting that the Republican-led Congress (and the Republican in the White House) have gone five straight years with no increase in the maximum Pell Grant.

The subject of Wednesday's deliberations, formally, was H.R. 5, which would steadily cut the interest rate on new subsidized loans for undergraduate borrowers to 3.4 percent from 6.8 percent between July 2007 and July 2011, with the rate scheduled to climb back up after January 2012 unless the cut were extended permanently. The plan's $6 billion price tag would be paid for by increasing fees and shrinking subsidies for loan providers, especially big lenders.

That latter fact was one of several that Republican lawmakers (who seemed to relish their newfound status as the opposition party, lobbying grenades and tsk-tsk-ing instead of governing) raised repeatedly throughout the hours of debate. "A classic bait and switch," Rep. Tom Price (R-Ga.) said of the recent revelation that the final cut in the rate would be in effect for only six months

A steady stream of Republicans took to the House floor to offer a range of criticisms: Democrats abandoned their vows of working in a bipartisan way, allowing no debate on the bill at the committee level, and structuring the floor vote in a way that permitted no amendments. The bill will help graduates but no current students, since the government pays the interest on subsidized loans while borrowers are in college. The $6 billion the legislation would cost would be better spent on funds for needy students. Democrats are doing the easy part by spending more money, when the real way to improve college affordability is by taking steps to slow the pace at which colleges' increase their prices.

"In countless ways, we can do better than H.R. 5," said Rep. Howard P. (Buck) McKeon (R-Calif.), former chairman of the Education and Labor Committee and now its top Republican. "I just wish we had that opportunity. Because the bill before us -- as well-intentioned as it is -- is just not what it seems. It’s not a student aid bill. It doesn’t expand access. And it doesn’t enhance affordability."

Democrats bristled at the criticisms and especially scoffed at Republican charges that the Democrats were ignoring low-income students. They insisted too many times to count that the interest-rate cut is just the "first step" in their broader plan to deal with college access and affordability -- they have promised more funds for Pell and said several times that they were sympathetic with McKeon's proposals -- which he had hoped to attach to this bill -- to hold colleges more accountable for their spending.

"Can we do more on affordability? Should we do more on the Pell Grant? Of course," said Rep. Ron Kind, a Wisconsin Democrat.

But those rare moments of hat-tipping were far outnumbered by angry denunciations of Republican shifts of funds from the loan programs toward tax cuts in the last Congress, which led to multiple rounds of bickering over whether or not the Republicans had really enhanced the Pell Grant Program (the size of the maximum grant grew significantly in the early years that Republicans controlled Congress in the late 1990s, but spending on the program has expanded significantly in the last only because more and more needy students have flooded into the program -- the per-student maximum amount has stayed flat since 2001.

Rep. George Miller (D-Calif.), who now heads the House education panel, insisted that despite Republican claims to the contrary, the interest rate cut would help students -- several million of them -- by shaving several thousand dollars apiece off their often crushing loan burdens and, in that way, perhaps encouraging some students who wouldn't have gone to college to do so.

"I find it interesting that my colleagues think this won't help a single student," Miller said at one point in the debate. "You know who thinks this will help students? Students!" he said, citing support for the measure from the United States Student Association and the U.S. PIRG's higher education project. "Apparently, this won't help any of the Republican members of Congress, but it will help students."

Ultimately, more Republicans than not followed the course of Rep. Ric Keller of Florida, who headed the House higher education subcommittee in the last Congress. Although Keller criticized the bill for many of the reasons cited by his colleagues, he said he would "show a little bit of good faith by voting yes on this bill today. Tomorrow," he said, "I hope the Democrats will show good faith" by paying attention to skyrocketing college costs and taking up more Pell Grant spending.

Senate Democrats support the interest rate cut, too, and Sen. Edward M. Kennedy, chairman of that chamber's education committee, released a statement saying his panel expects to combine the measure with other higher education legislation in the coming weeks.


Back to Top