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The student loan interest rate deal negotiated last week is getting a very lukewarm response from the Democratic majority in the Senate, and is in danger of passing with a minority of Democratic votes. The vote could be as soon as Wednesday.
Senate Democratic leaders are negotiating whether to allow votes on a handful of amendments from liberal lawmakers to a bipartisan agreement reached last week on student-loan rates, according to Democratic leadership aides.

The discussion reflects liberal unease with the agreement announced last week and raises the likelihood that it may not pass with a Democratic majority. Democratic vote-counters now put the number of likely votes from their party “in the low 20s,” according to a leadership aide. [...]

Democratic aides described the amendment process as fluid, but the list of possible changes included submissions from Sens. Bernie Sanders, I-Vt., Patty Murray, D-Wash., Jeff Merkley, D-Ore., and Jack Reed, D-R.I.

There's a solution that would mollify most Democrats. That's Sen. Jack Reed's amendment to cap interest rates at 6.8 percent on Stafford loans, 7.9 percent for graduate loans, meaning they wouldn't go any higher than they are set at right now. As currently written, Stafford loans rates for undergraduates could go as high as 8.25 percent for undergraduates, 9.5 percent for graduate students, and 10.5 on PLUS loans available to graduate students and parents of students. Sens. Elizabeth Warren and Sheldon Whitehouse have lent their support to that amendment.

Most important, the Reed amendment would keep these loans affordable. Young people are already coming out of college crippled by debt. Student loan debt surpasses both credit card debt and auto loan debt, and its a growing anchor not just on college graduates, but on the economy. Keeping that debt from getting more out of control should be paramount for the Senate. Reed's amendment would help.

Please contact your senators and ask them to support the Reed amendment and put a reasonable cap on student loan interest rates.

Originally posted to Joan McCarter on Tue Jul 23, 2013 at 11:01 AM PDT.

Also republished by Youth Kos 2.0 and Daily Kos.

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Comment Preferences

  •  Tip Jar (12+ / 0-)

    "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

    by Joan McCarter on Tue Jul 23, 2013 at 11:01:29 AM PDT

  •  Is there no way to scuttle the deal entirely? (3+ / 0-)
    Recommended by:
    OleHippieChick, chuckvw, Joe Hill PDX

    I'm glad that we don't let private companies siphon easy money off of federal loans anymore (one of the best things Obama has done was to end that practice), but the government should not arbitrarily profit off of students. The rate should be at cost, or actually below cost—taxes should subsidize education! Even better would be to reduce tuition at public schools.

    Even with the amendment, that maximum rate is way too high. Stopping worse harm already in the works is good, but is there no way to undo the deal altogether?

    Government and laws are the agreement we all make to secure everyone's freedom.

    by Simplify on Tue Jul 23, 2013 at 11:10:02 AM PDT

  •  Just received an email from the White House (1+ / 0-)
    Recommended by:
    DocGonzo

    celebrating the crap "compromise". It must be great to be a bank!

    We've got some good news to share! Senators from both parties have come up with a plan to reduce the interest rates on student loans. Once it becomes law, rates on every single new college loan will come down before the start of the school year.  
    Because of this agreement, 11 million borrowers will save money, and we need help to make sure that everyone gets the details. The graphic below breaks down all the facts, and gives parents, undergrads, and grad students the information they need to know what they can expect in the years ahead.  
    Here's the graph. Note the caps... They really think we're idiots...

    Most truths are so naked that people feel sorry for them and cover them up, at least a little bit. --Edward R. Murrow

    by chuckvw on Tue Jul 23, 2013 at 01:11:20 PM PDT

  •  student loan interest rates (1+ / 0-)
    Recommended by:
    BroadwayBaby1

    Tie them to the current interest rates on consumer savings accounts.
    Currently 0.5%–1.5%, and they wonder why nobody saves anymore.

    •  No Tie (1+ / 0-)
      Recommended by:
      mcmom

      Why tie them to anything? In fact, why have interest? Why even have loans? Our foreign competitors just pay for their students to go to college. Just as we pay for our students to go K-12. Raise taxes on everyone else (especially those whose wealth comes from college graduates) to pay for it.

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Tue Jul 23, 2013 at 02:25:21 PM PDT

      [ Parent ]

  •  This might make sense if (1+ / 0-)
    Recommended by:
    DocGonzo

    interest rates were the central problem, as opposed to the wildly inflated basic costs to which these interest rates are attached. Borrowing the cost of a house to pay for a B.A. is the root of the problem, which chipping at interest rates will do nothing to address.

    •  Make Schools Compete (0+ / 0-)

      We should be spending the student loan profits on scholarships to public schools, making them compete better with private schools. And actually audit the "schools ranking" scores that have recently been shown to be as rigged as the bank credit ratings agencies' scores. Then watch the private tuitions drop. And teaching careers rise, along with the country's education level.

      The payoff in critical thinking during elections would pay for everything.

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Tue Jul 23, 2013 at 02:27:37 PM PDT

      [ Parent ]

  •  The problem is... (0+ / 0-)

    ...rates now are entirely unacceptable.

    I get political reality, but can we please stop pretending that this would 'fix' anything. This would make a horrible deal marginally less horrible.

    Nothing here even begins to address the core of the problem.

  •  Here's a fresh idea (0+ / 0-)

    Here's a fresh idea for the morons in the Senate:  How about 0.05% interest?  

    That's about as much as the Federal Government should be charging to cover the paperwork.  We paid our taxes already for programs like the Stafford Loans.  

    Nearly 7%, my ass.  That's too damned high and an insult to the American people who fund the congressional clowns.  

    The discussion reflects liberal unease with the agreement announced last week and raises the likelihood that it may not pass with a Democratic majority.
    Liberal unease?  Their fucking hair ought to be on fire.  
  •  Spend the Profits on Scholarships (0+ / 0-)

    I heard the current interest rates are already paying the Federal government $120 BILLION in annual profits. If so, that's enough to give 5 million students each a $24,000 annual scholarship. The US graduated 3.3M high school students in 2008. We should spend the money on sending 5M high school graduates, and millions more starting from somewhere else, to public schools (maybe give 50% the amount to private college attendees). Public 4 year colleges cost under $9,000 per year for in-state. We should increase that amount to average $15,000 or so, and improve all public colleges to compete better with private ones, and bring down all these costs.

    Our foreign competitors all recognize the obvious fact that investing in education is by far the best expense any community or society can spend.

    If we are going to make higher education pay for itself, we should simply tax everyone who attended any higher education to pay for it. Social Security, the IRS and the Census each calculate the average extra income made by people who entered college vs people who skipped it. Divide the amount of the universal schlarship fund by the number of people with the "college elevated incomes", and charge them their share. Give everyone 5-10 years after leaving college to start paying, and stop their payments when they start collecting SS.

    Oh, and leave all the banks out of it. They're the ones who ruin the economy, and add nothing but corruption and robbery to everything they touch.

    We already make far more than enough on the 4% interest. If we're going to charge up to 7-8%, we must reinvest it all in improving education. Those extra hundreds of billions will be well spent on the K-12 public education.

    Then maybe our descendants will be smart enough to stop charging interest and just collect lots of education money from the richest before even charging the rest of the people who work for the richest to learn how to work for them.

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Tue Jul 23, 2013 at 02:19:31 PM PDT

  •  Classic Democratic Scam (0+ / 0-)

    Yes, now we can thank Democrats for doubling student loan rates. Hooray!

    This is the classic Democratic scam: Republicans try something intolerably crazy, so Democrats get them to do something only half intolerably crazy. Then we thank Democrats.

    Republicans are trolls, designed to keep the people satisfied with half intolerably crazy. Democrats are sockpuppets, designed to look serious and compassionate compared to the Republican trolls.

    One of the top scams on Earth, and only getting worse. It's been a while since the results became unsustainable. We're just waiting for the heart to stop beating.

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Tue Jul 23, 2013 at 02:22:17 PM PDT

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