WASHINGTON, July 24 – Over Sen. Bernie Sanders (I-Vt.) opposition, the Senate today voted 81-18 for a college loan bill that would lead to higher interest rates for students and parents who borrow money for college.
The vote came after the Senate rejected an amendment by Sanders to have the bill expire after two years before the sharpest increases in interest rates are expected to occur. “The idea of passing legislation that in a few years is going to make an already bad situation of student indebtedness even worse is absolutely absurd,” Sanders had said in a floor speech earlier today calling for the two-year sunset provision. The vote on the Sanders amendment was 34-65.
A member of the Senate education committee, Sanders cited Congressional Budget Office projections that under the Senate-passed bill interest rates would hit 7.25 percent for undergraduate loans in five years. By 2018, graduate loans would go up to 8.8 percent and parents would be charged 9.8 percent on loans for their children to attend college, according to the analysis by the non-partisan agency that provides economic data for Congress.
“At a time when the average student is graduating from a four-year college $27,000 in debt, when hundreds of thousands of capable young people no longer see college as an option because of high costs and when the U.S. is falling further and further behind our economic competitors in terms of the percentage of young people graduating from college, this legislation will make college even less affordable than it is today,” Sanders said.
Sanders also cited a Congressional Budget Office report that the revenue raised from the steeper loan rates will mean “huge profits” for the federal government of some $184 billion over the next decade.
“We have a middle class which is disappearing. The number of Americans living in poverty is near an all-time high. We have millions of families struggling to be able to send their kids to college. So what is the United States government doing? We are helping to balance the budget by saying to middle-class, working families that if you want to borrow money to send your kids to college we are going to make $184 billion in profits off of you. Let me go on record as saying I think that that is a very counterproductive idea. It is a dumb idea.”
