Student Rates-- Another Republican Scam
It was more true when I was living in Europe, but even here, "student rates" were always a great deal for struggling students-- especially for getting into museums, public transportation, cinemas... But, like with so many good things, the conservatives have come along and twisted it into something profitable for them... and a nightmare for the rest of us. Tamar Lewin broke the story at the NY Times last week about the political battle over student loans. Conservatives-- on behalf of the campaign contributors in the for-profit loan business-- are trying to double the interest rates.
President Obama begins an all-out push on Friday to get Congress to extend the low interest rate on federal student loans, White House officials said, an effort that is likely to become a heated battle along party lines. If Congress fails to act, the interest rate on the loans, which are taken out by nearly eight million students each year, will double on July 1, to 6.8 percent.
...At a time when Americans owe more on student loans than on credit cards-- student debt is topping $1 trillion for the first time-- and the Occupy movement has highlighted the rising furor over spiraling student debt, the issue has moved higher on the political agenda. But the question of what to do about the looming interest rate increase has landed deep in the chasm separating Democrats from Republicans, who accuse the president of using the issue in a fiscally irresponsible way, in an attempt to buy the youth vote.
The Congressional Budget Office has estimated that a one-year freeze on the interest rate for subsidized Stafford loans would cost $6 billion.
“Bad policy based on lofty campaign promises has put us in an untenable situation,” said John P. Kline Jr., the Minnesota Republican who is chairman of the House Committee on Education and the Workforce.
The low interest rate stemmed from the 2007 College Cost Reduction and Access Act, which reduced interest rates on subsidized Stafford loans over the following four academic years-- from 6.8 percent to the current 3.4 percent-- with the proviso that the rates would revert to 6.8 percent this July. Extending the low rate would be too costly, Mr. Kline said. “We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers,” he said. “I have serious concerns about any proposal that simply kicks the can down the road and creates more uncertainty in the long run-- which is what put us in this situation in the first place.”
Mr. Kline, who earlier this year called the interest-rate hike a “ticking time bomb set by Democrats,” said he was exploring other options in hopes of finding a solution that served borrowers and taxpayers equally well.
When the 2007 law was passed, 77 Republicans-- most of whom are still in Congress-- voted for it. But in the current climate of fractious partisanship, new legislation introduced by Representative Joe Courtney to extend the lower rate has 127 co-sponsors, all of them Democrats.
Mr. Courtney said he was hopeful that some Republican support would be forthcoming as the political stakes became more apparent.
Short version: Democrats are trying to pass H.R. 3826 to keep the interest rates on student loans at 3.4% and if Republicans and Blue Dogs sabotage them the rates will double to 6.8% on July 1. Eric Cantor's response: Forget it! Democrats behind the bill circulated a letter to their colleagues making the case, based on fairness, which doesn't ever move the GOP leadership:
"When Treasury bonds are being sold at 2 percent and mortgage rates can be had for less than 4 percent, it is outrageous to make college students pay two to three times the going interest rate. As parents and grandparents, it is unconscionable that we would even consider putting this burden on our children. As America faces an incredibly competitive global economy, it makes no sense for Congress to shortchange investing in the college education necessary to ensure that the United States will continue to have the most highly educated workforce in the world."
When we were writing about Republicans trying to make profit for themselves out of overcharging students, it was crooked California Republican, Buck McKeon (currently under investigation by the House Ethics Committee for taking bribes from Countrywide in return for his support of their agenda), who was running the scam for the GOP.
McKeon took a great deal of money from the banksters ($1,015,098 from the financial/insurance/real estate sector in return for his lockstep approval of all the deregulation bills that allowed the sector to loot and plunder the American people since he was first elected in 1992). Even with one of the worst foreclosure rates in hard-hit California (14,898 foreclosures in CA-25), McKeon still voted against allowing bankruptcy judges to change the terms of mortgages. In fact, he's been a 100% obstructionist and has voted against everything President Obama has tried to accomplish to ameliorate the effects of the economic collapse that McKeon and his cronies in Congress brought on with their wrong-headed policies, policies meant to serve the needs of their wealthy, powerful campaign donors.
But McKeon's particular piece of the pie was in setting the Republican policies on the House Education Committee he chaired-- the primary source of the bribes that have financed his disgraceful career in politics. How much damage has he done? Almost immeasurable-- and he's still trying to do more. When President Obama proposed $85 billion in student loans go directly to students, cutting out the finance industry middlemen (McKeon's campaign donors), McKeon went ballistic. Like all the hypocritical wingnuts who scream and moan about government spending too much, if government tries saving money by cutting out corrupt contractors and middlemen, he really gets serious. He's taken in over $500,000 from the crooks in this useless and dysfunctional bureaucracy and he has no intention of sitting back and watching Obama destroy it-- regardless of how much money it saves the taxpayers ($47.5 billion over the next ten years) and no matter how much more money we get going directly into education.
Now McKeon has moved on to the far more lucrative Armed Services Committee-- he is now the #1 most heavily bribed Member of Congress (even more than any senator) by armaments manufacturers and war contractors-- and has left the GOP's predatory strategy towards students to his cronies John Kline (R-MN), chair of the Education and Workforce Committee, and Virginia Foxx (R-NC), chair of that committee's subcommittee on Higher Education. Let's take that crazy little fireball from North Carolina since she's been running her mouth all week about how she has no tolerance or, to be precise, "very little tolerance" for people who graduate from college with huge student loans. Open Secrets offers some excellent context that paints Foxx as a money-grubbing suck-up for the private loan industry which has been funneling thousands of dollars into her miserable political career. Foxx, they assert, "has become a magnet for campaign contributions from for-profit universities,"
Last year a Senate investigation found that nearly one-quarter of students at for-profit schools end up defaulting on student loans, and half of defaults on all student loans are by students at for-profit schools. At the time there was a lot of noise about possibly rewriting rules for how these for-profit schools can operate because so many of their students rely on federal grants or student loans - until a big lobbying push by the industry seemed to quiet things down.
In her first year on the subcommittee, Foxx picked up at least $48,668 from PACs or individuals affiliated with for-profit colleges. We counted 22 companies or trade associations in the for-profit college industry on the list of her top contributors, including: Bridgepoint Education, the Association of Private Sector Colleges and Universities, the Apollo Group (which owns the University of Phoenix) and student loan lender NelNet Inc.
Check out our politician profile for Foxx and especially the list of top contributors to see which groups with ties to the student loan business have contributed to her campaign war chest.
In the radio interview Foxx explained that she worked her own way through college and never borrowed a dime to get through to graduation. She went on to criticize people who think success should be handed to them.
Foxx has certainly seen her own financial success-- we rank her as the 54th wealthiest member of Congress.
In the current cycle, Bridgepoint Education has bribed many of the Republicans on the committee (as well as the sleazier Democrats who don't understand-- or care-- that only criminals take bribes):
John Kline (R-MN)- $8,500
Thomas Petri (R-WI)- $1,000
Buck McKeon (R-CA)- $2,500
Virginia Foxx (R-NC)- $6,000
Glenn Thompson (R-PA)- $1,000
Kristi Noem (R-SD)- $4,500
Joe Heck (R-NV)- $1,000
Robert Andrews (D-NJ)- $6,000
Bobby Scott (D-VA)- $2,000
Carolyn McCarthy (D-NY)- $2,000
Susan Davis (D-CA)- $1,000
Tim Bishop (D-NY)- $2,500
Dave Loebsack (D-IA)- $7,500
The Association of Private Sector Colleges and Universities also seeks to bribes the members of the committee. Kline and Foxx were the two biggest recipients of bribes but they gave to committeemembers/crooks on both sides of the aisle:
Jason Altmire (Blue Dog-PA)- $1,250
Robert Andrews (D-NJ)- $1,000
Judy Biggert (R-IL)- $500
Virginia Foxx (R-NC)- $5,000
Trey Gowdy (R-SC)- $500
John Kline (R-MN)- $5,000
Caroline McCarthy (D-NY)- $2,500
Buck McKeon (R-CA)- $3,500
Kristi Noem (R-SD)- $1,500
Todd Rokita (R-IN)- $500
Dennis Ross (R-FL)- $500
Glenn Thompson (R-PA)- $1,000
The Apollo Group (Phoenix University) is bribing across party lines but almost all of their money goes to corrupt conservatives, mostly Republican ones. Kline and McKeon were the top bribery recipients on the committee, with Foxx close behind.
Robert Andrews (D-NJ)- $4,000
Virginia Foxx (R-NC)- $4,000
John Kline (R-MN)- $5,000
Buck McKeon (R-CA)- $5,000
And for-profit-lender NelNet, Inc only gave to Foxx ($2,000) and Kline ($3,400) among committee members so far this cycle. In past years McKeon has been their biggest recipient of bribe money.
Progressives on the committee, like Raul Grijalva don't accept bribes. Progressives are calling for debut forgiveness for those struggling under massive amounts of student loan debt and pushing Hansen Clarke's (D-MI) Student Loan Forgiveness Act. As MoveOn told it's members a few weeks ago "Since 1999, average student loan debt has increased by a shameful 511%. In 2010, total outstanding student loan debt exceeded total outstanding credit card debt in America for the first time ever. In 2012, total outstanding student loan debt is expected to exceed $1 trillion."
Yesterday Willard tried to show how independent he is of the congressional GOP's unpopular, sociopathic behavior. Doubling student loan rates is not popular among independents and swing voters. So Romney backed away-- at least on the surface-- from the Republican positions he's been mouthing all through the campaign. He's backing President Obama's position... if not the Loan Forgiveness that progressives want. "I fully support the effort to extend the low interest rate on student loans," he told the media. I wonder how long it will take him to flip-flop on this one. And what about when he has to pick between potential VP nominees-- Portman, Ryan, Rubio-- who are all in favor of doubling the rate.