Senate Candidates Agree On Extending Student Loan Rates, But Not How
BOSTON — Both Massachusetts Republican Sen. Scott Brown and his Democratic challenger Elizabeth Warren agree Congress should extend the current interest rate on Stafford student loans by one year; if Congress doesn’t act, the interest rate on loans issued after July 1 will rise from 3.4 percent to 6.8 percent.
Warren weaves her support into her stump speeches. At a rally in Dorchester, she told the crowd she got an affordable public education because the government invested in programs that helped her:
I’m worried that mine is a story that is embedded in time. I grew up in an America that was investing in kids like me and I worry that we are turning away from that.
On the Senate floor, Brown explained by why he supports keeping the rate low:
With so many recent grads underemployed, members of Congress need to work together to find a way to keep interest rates where they currently are.
But Brown and Warren disagree on how to make up the $6 billion the government would lose if it keeps the current rate. Warren supports Democratic proposals that close tax loopholes to make up the shortfall. Brown has put forth a bill that proposes using money recovered from improperly dispersed government funds.
“I think they are playing politics with this,” said Bob Giannino-Racine, the head of Access, a nonprofit that helps students figure out how to pay for college.
“Both sides clearly suggest they want to put our students first and try to find policy solutions that ensure that the interest rates stay at their current levels,” he said. “But meanwhile, both parties are more focused on trying to score political points than trying to sit together and find a real, workable solution.”
On the campaign trail, Warren chastised Brown for voting against a proposed solution. One of his votes was on a bill that would have made up the funds by closing a tax loophole.
“He’s made it clear what his priorities are,” Warren said. “He’s fine with protecting subsidies for big oil companies, but when it comes to our young people, when it comes to an education, hey, no help for them.”
The bill to keep student loan rates low didn’t have anything to do with tax subsidies for oil companies. Brown said he voted against the proposal because it would have raised taxes on small businesses, and he said that would be a jobs-killer. And he notes he voted for a Republican bill that would have used spending cuts to extend the subsidized loan rate.
“We need to stop adding to our debt and deficit,” Brown said. “It’s certainly important to protect the student loan interest rates and keep them where they are, but it’s also very important to get our handle on our debt and deficit and that’s what we are not doing.”
This back and forth is part of politics. But it’s getting in the way of a solution, says Paul Combe, president of the nonprofit American Student Assistance.
“There are many multiple ways that this can be solved,” Combe said. “And the point is, there’s no incentive for anybody to look at those kinds of compromises to make it reasonable.”
Combe said one compromise is to peg the student loan rate to something like mortgage rates. Combe is also frustrated by what’s not being addressed in Congress or in the Massachusetts race for Senate.
“This dialogue about the interest rate has nothing to do with the 37 million Americans who already have loans out in the marketplace and are trying to repay them,” Combe said.
Those student loans total close to $1 trillion. Brown and Warren’s differences on how to pay for extending the Stafford student loan rate mirror the party differences in Congress. On this issue, Brown has joined his fellow Republicans to block anything that can be seen as a tax increase. Warren’s fellow Democrats have blocked anything that would find the money from entitlement spending. Thus, the stalemate in Congress and the back and forth on the campaign trail in Massachusetts continues.