Alexander Calls for Vote on “Bipartisan Proposal” to Reduce Student Loan Interest Rates By Returning to Students Money They Are Overcharged in Health Care Law

Posted on May 8, 2012

“The Congressional Budget Office said there was a savings of $61 billion when the federal government took over the [student] loan program, and that $8.7 billion of that [profit] went to pay for the health care law—we ought to take the money that the government is overcharging students to help pay for the health care law and pay to keep this rate lower.” – Lamar Alexander

 

WASHINGTON – U.S. Senator Lamar Alexander (R-Tenn.), a former U.S. education secretary and former president of the University of Tennessee, today opposed a bill that would increase taxes on small businesses to keep interest rates on new subsidized Stafford student loans at 3.4 percent for a year, and called for a vote on his bill to keep these interest rates at 3.4 percent by returning money “overcharged to students to help pay for the health care law.”

 

Alexander said today on the floor of the U.S. Senate: “We agree with President Obama, we agree with Governor Romney, and we agree with the House of Representatives that the rate for subsidized student loans should stay at 3.4% for the next 12 months….The only difference we have is how to pay for it. [Senate Democrats] want to raise taxes on people who are creating jobs while we're still the in the midst of the greatest recession since the great depression.”

 

“[Senate Republicans] have a different proposal, which we believe is superior, and is the same as the one that passed the House of Representatives. We would like a chance to offer students the Student Interest Rate Reduction Act, which will stop overcharging them and give the money back to them. We'd like to have a vote on that.

 

“I recommend that we keep the rate at 3.4 percent, that we recognize that the savings that we are taking from students, overcharging them for student loans, is the best way to pay for it, and hopefully the Majority Leader will allow us to consider the [bill] we propose.

 

“Let’s be clear about this. It’s not just Republicans who think that fund isn’t the best use of taxpayers’ money. It’s almost all the Democrats on that side of the aisle, because in February, the Middle Class Tax Relief and Job Creation Act was passed … in this Senate, and every Democrat except six voted to take $5 billion out of the fund we’re talking about to pay for [that bill], and it’s not only the Democrats on that side of the aisle – it’s the President of the United States … President Obama in his February 13th budget proposal proposed taking $4 billion away from the fund. And then in his 2011 deficit-reduction package, he proposed taking $3.5 billion from the fund. So, it’s a bipartisan proposal.

 

“The Congressional Budget Office said there was a savings of $61 billion when the federal government took over the [student] loan program, and that $8.7 billion of that [profit] went to pay for the health care law—we ought to take the money that the government is overcharging students to help pay for the health care law and pay to keep this rate lower.

 

“If we could get a vote on that here and pass it in the Senate, we could send it to the president and he could go around the country saying that he has worked with the Congress and he has produced this way to help students save money.”

 

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