Last updated on September 25th, 2023 at 01:37 pm
Sen. Bernie Sanders called out the White House today for leaving out the part of the Senate’s student loan compromise bill that will raise interest rates on borrowers.
The White House released a fact sheet about the compromise today that went heavy on the soft sell, “Under the compromise plan, nearly 11 million borrowers will see their interest rates decrease on new loans after July 1, 2013. About 8.8 million undergraduate borrowers will see their rates on new loans drop from 6.8 to 3.86 percent, and about 1.5 million Graduate Unsubsidized Stafford borrowers will see their rates drop on new loans from 6.8 percent to 5.41 percent. And over 1 million GradPLUS and Parent PLUS borrowers will see their rates on new loans drop from 7.9 percent to 6.41 percent—the first reduction in years.”
What the White House put out was true, but Sen. Bernie Sanders criticized them for leaving out a few very important details, “The White House is being disingenuous and is trying to sweep under the rug big increases in interest rates for students and parents in the near future. Because college costs are out of control and interest rates are rising, students are leaving college deep in debt or in some cases choosing not to continue their education because they cannot afford it.”
Nowhere in the White House fact sheet does it mention that according to the CBO, interest rates would hit 7.25 percent for undergraduate loans in five years, and that 2018, graduate loans would hit 8.8 percent and parents would be charged 9.8 percent on college loans. That’s a huge detail.
The White House fact sheet claims that the bill would tackle the problems of rising tuition and debt, but in the long term the bill will add to student debt. The difference between the compromise Senate bill that the White House is supporting and the House passed bill that they oppose is that the higher interest rates are delayed for a longer period of time in the Senate compromise.
This bill is bad news for borrowers. That is why Sen. Sanders is trying so hard to defeat it. Since the big rate increases won’t hit students until a couple of years after the president is out of office, it’s no surprise that the White House is supporting this bill. Politically will they get the credit for lowering the rates now, and the next president will have to fix it before the rates get too high in 2018.
For all of the good things that the Obama administration has tried to do, every once in a while they push a bad idea in order to try get something done. This White House appears to be more concerned with helping borrowers today than they are with what will happen five years from now.
This compromise with Republicans is not a good idea, and Bernie Sanders is fighting tooth and nail to protect students.
Awards and Professional Memberships
Member of the Society of Professional Journalists and The American Political Science Association
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