GOP blocks student loan bill

McConnell: Democrats want an issue 'to save their own hides this November'
Associated Press
Jun 12, 2014

Senate Republicans on Wednesday blocked legislation aimed at letting people refinance their student loans at lower rates, a pre-ordained outcome that gave Democrats a fresh election-year talking point against the GOP.

The 56-38 vote fell short of the 60 that would have been needed to advance to debate on the measure by Sen. Elizabeth Warren, D-Mass. Her bill would have let millions of borrowers, some with years-old debt and interest rates topping 7 percent or more, refinance at today's lower rates.

The bill would have been paid for with the so-called Buffett Rule, which sets minimum tax rates for people making over $1 million.

"With this vote we show the American people who we work for in the United States Senate: billionaires or students," said Warren. "A vote on this legislation is a vote to give millions of young people a fair shot at building their future."

Republicans said the bill wouldn't have done anything to lower education costs or reduce borrowing, and they accused Democrats of playing politics by highlighting an issue that was bound to fail.

"The Senate Democrats' bill isn't really about students at all. It's really all about Senate Democrats," said Minority Leader Mitch McConnell, R-Ky. "They want an issue to campaign on to save their own hides this November."

Student loan debt has topped $1 trillion and emerged as a drag on the economy and on middle-class families across the country, making it a ripe target for politicians ahead of midterm elections where Democrats risk losing their Senate majority. Wednesday's vote followed two days where President Barack Obama highlighted the issue from the White House, announcing executive action to let more borrowers to cap their monthly payments at 10 percent of their income and answering questions about the issue on the social networking site Tumblr.

The Obama administration said Warren's bill could have helped some 25 million borrowers save $2,000 each over the lifetime of their loans. It would have allowed people with older loans at higher interest rates refinance to rates below 4 percent offered today under a deal reached a year ago in Congress.

Three Republicans joined all Democrats in voting to proceed to debate on the bill: Susan Collins of Maine, Bob Corker of Tennessee and Lisa Murkowski of Alaska.

Some 40 million Americans have outstanding student loan debt totaling $1.2 trillion, making it the second-largest form of consumer debt, second only to mortgages, according to Warren's office. People 60 and older account for some $43 billion of outstanding student loan debt.

Comments

Informed

All colleges are expensive, some just more than others.

freethinker1

Sam: College students understand the size of the loan. They simply don't have any other choice. If they want a college education, but can't afford it and/or don't qualify for grants, a loan is the only other option.

They enter that loan knowing that the average college graduate earns roughly $1 million more over a lifetime compared to a high-school graduate. So, at age 18, it sounds like a good trade-off: be in debt on the short-term, and make more money in the long-term. What they don't realize is that the loan companies tilt the tables in such a way that it's difficult - at best - to ever pay off the loan.

It's also a self-perpetuating problem. The high loan debt lowers their credit rating. So they can't get a good job, or a home loan or car loan.

grumpy

You always have a choice, unless they have a gun to your head. You can work for a year or 2 and save for college, you can work part time and go to school part time, you can join the military and use those benefits and save for college, to name a few. It just isn't what some folks would rather do. They want others to pay for their schooling. They think there is only one way to do it and won't consider other options. Then want someone else fix the consequences of their decision. Preferably the gov't.

Informed

1. One would have to work for a heck of a lot longer than a year or two to pay for college. I don't know too many 18-year-olds who make $40,000 a year. 2. Many college students alreayd work part-time. That doesn't pay for school. 3. Not everyone is eligible to join the military (such as those with asthma or other health problems), and the military often makes cuts.
Most people who go to college do not want others to pay for their education.
Do you realize that almost every middle class college student has to take student loans, parent PLUS loans, or both? There is no way to afford it otherwise.

grumpy

If you are going to a college that costs $40 grand a year and don't have grants, personal savings, parental help, scholarships or something else to pay for it, you CAN'T afford the college of your choice. You should find what you can afford and go from there. Why do you think you are special enough to get something you can't afford? It is called growing up and living within your means. Why should someone else pay for you? There are grants, and scholarships and the military all out there that can be used. If you casn't afford something you shouldn't get it. I want a private jet but can't afford one. Will the gov't buy me one and pay to maintain and service for it? I guess I won't be getting one soon. My life is SOOOO hard. I can't get what I want.

Informed

I never said college costs $40,000 a year. You said to work for a year or two so you can save for college. Four years of college at only $10,000 )not counting room, board, books, etc) is $40,000. How would you save for that in a year or two?

grumpy

As stated above. If you can't get grants, scholarships, haven't saved, don't get parental help, won't go into the military to get benefits, you can't afford college. Are you special and expect others to pay yiour way? The special ones have gotten scholarships, grants and such. If that is not you, you can't afford what you can't pay for. You know what people who live beyond their means are? Bankrupt. Work part time, school part time, join the military, save as much as you can for college.

Why do you think you are owed a college education for free? Because you were born? Sorry for the rude awakening, it is called life, in the real world there is no such thing as a fair share. The pilgrims tried that the first couple of years after their landing and almost starved, then they were able to keep what they reaped and survived well and sometimes thrived. Beat the he77 out of starving, with a "fair share".

SamAdams

EXACTLY! This X 10.

Donegan

In other news the government just shipped off another 85 billion to wall street. I bet you liberals are glad Obama is not for the 1%ers !

The Big Dog's back

done again, were you born ignorant or did you practice at it? Post something factual at least once.

Donegan

Guess comedy central doesn't talk about the wall street bailouts. But thank you for typifying a common Democrat voters.
http://money.cnn.com/2013/10/30/...

The Big Dog's back

Do dates mean anything to you?

Donegan

I am not going to spoon feed you facts. Face it Obama likes rich people better than you.
Hows does it feel to know your god has forsaken you for those you despise? I think its funny you and coaster are infatuated to the point of obsession with someone who hates you.

freethinker1

Meh, we're still fixing that "little" financial crisis that Bush caused, aren't we? Yeah, I know, I know. You'd like to ignore history pre-2009, and sidestep that "little" issue of how the GOP push for deregulation led to the problem.

Are things perfect under Obama? Nope. Are the better than they would've been under McCain or Romney? Absolutely.

Shouldn't you be busy organizing a Going Away Party for Mr. Cantor?

Donegan

Oh look, blame and deflection. Don't you get tired of looking stupid defending the same thing youre against just because of the party label they wear?

Really are you ...

As was said before when Obama preached about sending our kids to college. We need to send our kids to college, to acquire better paying jobs, and secure a brighter future. That may not be his exact words, but that was the message he was relaying. The real problem that these kids can not repay their loans because there are no jobs available in their fields of study. Maybe there are some jobs in those fields, but not enough to pay loan debt back and live on their own. Highly educated burger flippers. Should have invested more in job creation and innovation. Just waiting for signs to be posted all over Washington DC. "SOLD!"

Dr. Information

You liberals who have extra cash laying aruond (hehe) are more than welcome to loan local college kids the money they need for college interest free and on a pay as you want to schedule.

Really are you ...

I forgot the place down in southern Ohio. Obama visited there in his jobs across America campaign. The 3D Printer. Right!

AJ Oliver

to say that the Warren bill would "does little to nothing to help any student" is totally ridiculous and shows once again how the right just makes stuff up without any regard at all for facts. Many of the honest old cloth coat Republicans have left the party for that reason. They cannot abide the gun crazy, anti-science, tea party crowd that runs the party now.
And, oh yes, the Civil War was TOTALLY about slavery. The modern right does not believe in history either, again prefering to make stuff up.

Contango

Re: "the Civil War was TOTALLY about slavery."

At it's essence it was a constitutional crisis.

Slavery?

Yea, Those rich New England textile mill owners and the old moneyed New England families who profited off the African slave trade were wholly innocent. lol

Contango

Re: "Warren bill,"

Just another taxpayer subsidy for liberal academia.

Doesn't it bother you that some college presidents earn over $1M annually and that many endowment funds hold and earn billions in assets?

http://www.policymic.com/article...

http://money.cnn.com/2014/01/28/...

Altruism as practiced by liberal not-for-profits pays real well when funded on the backs of U.S. taxpayers.

Nemesis

"To say that the Warren bill would "does little to nothing to help any student"is totally ridiculous"

Oh how naive you are. It doesn't allow them to discharge the loan - it just lengthens the term. It's all about helping the banksters, by allowing them to keep the loan on the books rather than writing it off.

"And, oh yes, the Civil War was TOTALLY about slavery."

You go on believing that. Don't do anything like follow the money. You probably believe TARP was about helping homeowners, too.

freethinker1

Exactly. Last night, they filibustered Elizabeth Warren's bill, which would have allowed students to refinance their loans at a lower rate.

Assuming we are to believe that they actually care about middle-class Americans, what possible good reason is there to put students and their families further in debt?

It certainly is getting harder for their apologists to explain things, when literally EVERYTHING they do is an attack on the poor, middle-class, women, minorities...the list goes on. If I were a conservative, I'd be embarrassed.

The Hero Zone's picture
The Hero Zone

Setting your broad generalizations and undefined words aside, have you considered this?

Why must a bill be "paid for" that allows for a refinance? In other words who set the higher interest rate which itself doesn't seem to actually be touched. Instead the 7% is still paid, just half of it by someone else. Why?

Who not only set the 7% figure but is somehow magically holding the entirety of Congress hostage over it. Why is this the one figure they pivot around and honor instead of addressing it?

It makes absolutely no sense for anyone in government to point to that number as being whatever it is and pretend like it is immutable or somehow exists outside the realm of law. Why don't I just put a menacing-looking mannequin outside your window and then scare you into buying my protection service to keep him away. All you have to do is pay me and I won't pick it up and bring it closer to the house, causing you to panic as you see it move closer BY MY OWN HAND as I ask you for protection money. The best part is? You never blame nor question me for this tactic. You just expect it and thank me for keeping the mannequin away.

Sounds like Congress is a lot like Paulie from Goodfellas...

Henry Hill: [narrating] Now the guy's got Paulie as a partner. Any problems, he goes to Paulie. Trouble with the bill? He can go to Paulie. Trouble with the cops, deliveries, Tommy, he can call Paulie. But now the guy's gotta come up with Paulie's money every week, no matter what. Business bad? [F] you, pay me. Oh, you had a fire? [F] you, pay me. Place got hit by lightning, huh? [F] you, pay me.

The Big Dog's back

Ground control to Major hz.

The Hero Zone's picture
The Hero Zone

What's your vector, Victor?

EDIT: Actually after I thought about it for a moment it makes sense. If Congress doesn't touch the 7% interest figure they can always bring this issue up whenever they want to stir up the pot quickly prior to elections. If they actually just legislated the rate lower the population wouldn't be able to be upset and they wouldn't be able to use human beings as leverage for their policies such as a tax increase for something that never has to be "paid for" to begin with...

Huh. Well isn't that something. Barely any of them rotate out of office and so here we are with the same problems and non-solutions that we have been for years. Nothing gets done except continually re-electing the mannequen-placers outside our windows save on very rare occasions.

Congress creates a problem. Congress wants to address the results of the problem instead of fixing the problem itself thereby eliminating the results as well. Clever.

kURTje

Its okay. Got an idea the next CIC will not be from the GOP. Those out of touch people have angered too many everyday people for too long.

SamAdams

Not to worry, KURTje. A few more years of Obama's rule, followed by a few years of a Clinton (or other progressive) rule, and there won't be ANY everyday people left to be angered. The country will be filled with the poor, the REALLY poor, and a smattering of the very, very rich. If it makes you feel any better, guess which class Obama himself will be a member of?

Nemesis

The problem is that tuition has increased at a rate far above inflation. And why do you think that is? Why hasn't the price of cars, electronics, food, or even gas kept up with the price of college?

It's that same old law of supply and demand. Government financial aid increases demand, and the need-based model makes that demand incredibly elastic. If GM increased car prices, it sells fewer cars, if Samsung increases TV prices, it sells fewer TV's. A university never has to worry about how many students it will lose when it increases tuition, because the need-based formula will take up the slack.

There is no ECONOMIC competition between schools - quite the opposite - they race to have the HIGHEST, not the lowest price. They're in a tuition arms race - at least one CWRU board member once went on record that they had to raise their tuition because Carnegie Mellon raised theirs - it sounded like the alarmed exclamations about the mine shaft gap at the end of Dr. Strangelove.

The dominant outcome of government financial aid is that universities are swollen with unqualified students pursuing dumbed-down degrees in nonsense majors, many of whom never graduate. They don't make careful, well considered decisions about their education because they are spending someone else's money.

The Hero Zone's picture
The Hero Zone

I agree with your point. Is it reasonable, do you think, that even if we supported this practice it could lead to some kind of rationing of degrees? Similar to how we already see student loans forgiven if you work at a specific place or location? In other words if the national database shows we have too many business majors, it will refuse funding for those who want to be in business and "encourage" study elsewhere?

If it weren't already kind of happening even I would agree it would be a stretch.

- - - - -

Teacher Loan Forgiveness

If you are a teacher and also a new borrower (i.e., you did not have an outstanding balance on a Direct Loan or FFEL Program loan on Oct. 1, 1998, or on the date you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998) and have been teaching full-time in a low-income elementary or secondary school or educational service agency for five consecutive years, you may be able to have as much as $17,500 of your subsidized or unsubsidized loans forgiven. Your PLUS loans cannot be included. For more information, go to Teacher Loan Forgiveness. If you have a Federal Perkins Loan, see Perkins Loan Cancellation for teacher cancellation in that loan program.

Public Service Loan Forgiveness

If you are employed in certain public service jobs and have made 120 payments on your Direct Loans (after Oct. 1, 2007), the remaining balance that you owe may be forgiven. Only payments made under certain repayment plans may be counted toward the required 120 payments. You must not be in default on the loans that are forgiven. For more information, go to Public Service Loan Forgiveness.

https://studentaid.ed.gov/repay-...

Pages