Politicians Tussle Over Student Loans
Political wrangling over the college vote is underway.
In 2007, Congress passed a law lowering the interest rates on subsidized Stafford Loans from 6.8 percent to 3.4 percent. Those cuts are set to expire July 1.
The result could cost recipients thousands and affect the way students finance their education, said Wendy Stouffer, executive director of Academic Scholarships.
“Families are definitely going to have to look at finances as a whole,” she said. “Is getting a loan at 6.8 percent the best way to go?”
According to a report by USA Today, 7.5 students receive Stafford loans. The change could affect more than 6,000 UA students that accepted loans last semester, Stouffer said.
Both parties, in an attempt to gain the political upper hand, have authored bills keeping the rates lower, but both proposals have been unpalatable to the other side.
The House bill would take some funding out of the president’s health care law, a move Obama said he would veto.
“This doesn’t have anything to do with health care,” said Democratic Sen. Mark Pryor. “This is about student loans, and I’m not quite sure why [they are] making it about health care, whereas the Senate is focused more on paying for it by fixing tax loopholes.”
The Senate Democrats’ bill centers around cutting subsidies for oil and gas companies and raising social security and medicare taxes for some high earners, a plan Republicans oppose.
Republican Sen. John Boozman supports the House bill. He said that when Obama federalized student loans in 2009, the profits the government made went to fund the health care law, making partially defunding the law relevant.
“There’s a slush fund in the Obamacare health plan, that’s really not much of anything,” Boozman said. “We’re going to take money out and pay for it that way.”
Because neither bill will become law in their current forms, the symbolic votes are part of an effort to shore up support in the general election, said Janine Parry, UA professor of political science.
President Obama spent last week barnstorming college campuses and “slow jamming the news” with Jimmy Fallon, trying to portray Republicans as hostile to student loans.
“They’re shaping the constituency that they hope to have in November; in many ways that’s their goal,” Parry said.
The president has spent a good part of the year courting college students. In January, he proposed increasing federal funding for schools that kept tuition down and decreasing it for schools that could not. He has also attacked the Republicans’ budget plan because it cuts money from Pell Grants and education.
The new issue will help Obama, Parry said.
“In the case of the President, it will probably help him generate a little more excitement among young people, but Republicans probably aren’t counting on a lot of that support anyway, but they’d like to diminish any possible damage,” Parry said.
Ideally, legislators would support more education funding, but Republicans are concerned about a lack of tax revenue and growing deficits, Boozman said. Democrats have argued that though revenues have fallen, education funding is a necessary investment for the country.
“[Democrats] don’t want to talk about the red ink,” Boozman said. “We can’t continue to have a $1.3 trillion deficit.”
Though the two Arkansas senators disagree on how to resolve the issue, they both acknowledged it has been exaggerated in this election year.
“You have a problem that we shouldn’t of been in in the first place and there’s all kinds of people that are trying to point the finger,” Boozman said. “I think that it probably has been blown out of proportion.”
“It is a presidential election year and sometimes in a hotly contested race like you have for president, one side comes out for something and the other side feels like they have to be against it,” he said.