2008 Woodie Awards
The week in news
by Sarah Lipman
Issue date: 1/19/07 Section: News
DEMOCRATS PASS AN ALTERED STUDENT-LOAN BILL
With fanfare and bipartisan support, the House of Representatives delivered Wednesday on the fifth of six bills Democrats had vowed to quickly pass, voting overwhelmingly to cut the interest rate on some college student loans.
The bill, however, was scaled back from House Speaker Nancy Pelosi's campaign promise to cut all student loans in half.
Instead, the bill which passed 356-71, applies to the 5.5 million subsidized Stafford loans for students whose families earn between $26,000 and $68,000 a year, but would not increase Pell Grants or student tax credits, as originally planned. The bill sets a five-year phase-in of the interest rate reduction from the current 6.8 percent to 3.4 percent. After six months at 3.4 percent, however, the rates return to the original percentage.
House Democrats called it a first step to delivering some relief to students and their parents as college costs have skyrocketed 41 percent in public universities and 17 percent in private ones, and after college debt doubled between 1993 and 2004, according to the independent U.S. Public Interest Research Group.
The bill, however, has an uncertain future. The Bush administration questioned the wisdom of encouraging more loans rather than grants. Republicans alleged that Democrats were rushing to the floor - without benefit of vetting by committees - a bill that would give them a victory during the 110th Congress' first 100 hours but would do little to lower college costs. Democrats replied that they hoped to extend the lower loan rate beyond the five-year window in subsequent legislation.
Eager to keep their pledge to voters to pass long-stalled legislation in their first 100 legislative hours, House Democrats have passed through four other bills: implementation of the Sept. 11 commission recommendations, an increase in the minimum wage, support for embryonic stem cell research and a plan to lower Medicare's prescription-drug prices.
With fanfare and bipartisan support, the House of Representatives delivered Wednesday on the fifth of six bills Democrats had vowed to quickly pass, voting overwhelmingly to cut the interest rate on some college student loans.
The bill, however, was scaled back from House Speaker Nancy Pelosi's campaign promise to cut all student loans in half.
Instead, the bill which passed 356-71, applies to the 5.5 million subsidized Stafford loans for students whose families earn between $26,000 and $68,000 a year, but would not increase Pell Grants or student tax credits, as originally planned. The bill sets a five-year phase-in of the interest rate reduction from the current 6.8 percent to 3.4 percent. After six months at 3.4 percent, however, the rates return to the original percentage.
House Democrats called it a first step to delivering some relief to students and their parents as college costs have skyrocketed 41 percent in public universities and 17 percent in private ones, and after college debt doubled between 1993 and 2004, according to the independent U.S. Public Interest Research Group.
The bill, however, has an uncertain future. The Bush administration questioned the wisdom of encouraging more loans rather than grants. Republicans alleged that Democrats were rushing to the floor - without benefit of vetting by committees - a bill that would give them a victory during the 110th Congress' first 100 hours but would do little to lower college costs. Democrats replied that they hoped to extend the lower loan rate beyond the five-year window in subsequent legislation.
Eager to keep their pledge to voters to pass long-stalled legislation in their first 100 legislative hours, House Democrats have passed through four other bills: implementation of the Sept. 11 commission recommendations, an increase in the minimum wage, support for embryonic stem cell research and a plan to lower Medicare's prescription-drug prices.
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