Alexander: 19 Million Students Will Be Overcharged for Student Loans—to Pay for Health Care Bill

Says 200,000 Tennessee Students to Pay $1,700-1,800 More in Interest on Loans to Fund Washington Health Care Takeover

Posted on March 18, 2010

WASHINGTON – U.S. Senator Lamar Alexander (R-Tenn.), chairman of the Senate Republican Conference, today issued the following statement on preliminary estimates by the Congressional Budget Office (CBO) on the cost of the reconciliation package, which includes House Democrats’ proposals to “fix” the Senate-passed health-care bill and the proposal to end private student-lending in favor of direct-lending:

“Today’s preliminary CBO estimate indicates that not only will the health care bill cut Medicare, raise taxes, raise individual premiums for millions of Americans, and send to states big new costs that likely will require state tax increases. It will also overcharge 19 million students on their student loans—to help pay for the Democrats’ health care bill.

“This is how it will work: the federal government will borrow money at 2.8 percent and then lend it to students at 6.8 percent—spending the difference on health care and new government programs. In Tennessee, 200,000 students have student loans, so what this latest takeover means is that those Tennessee students will, on average, pay $1,700-1,800 more in interest over 10 years—to pay for the Democrats’ health care bill. The government—instead of using that money to reduce costs for students who are borrowing the money—will use it to pay for more government programs. According to the preliminary CBO estimate produced this morning, the new bill will take $9.1 billion over 10 years from students’ interest payments to pay for this health care takeover.”