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College loan rates remain low with House vote

2:21 PM, Apr 27, 2012   |    comments
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By Susan Davis, USA TODAY

WASHINGTON - The U.S. House approved, on a mostly party-line (215-195) vote, a $5.9 billion bill to maintain low interest rates for Stafford student loans, paying for it by slashing funds for a provision of President Obama's health care law.

Thirty Republican lawmakers voted against the bill, while 13 Democrats voted for it.

The legislation was fueled by politics after President Obama this week traveled to three college campuses in battleground states attacking Republicans for paying "lip service" to the issue of rising interest rates but not acting.

House Speaker John Boehner, R-Ohio, responded angrily to the accusation and said Obama was "wasting time on a fake fight" because Republicans intended to vote to protect the student loan rates before they expire in July. But the speaker's decision to move immediately to the bill ahead of a week-long congressional recess signaled concern over Republican vulnerability to the president's attack.

Unless Congress acts, the current 3.4% interest rate for Stafford loans would double on July 1. According to the most recent data for the 2010-11 school year, about 7.5 million undergraduates benefit from Stafford loans to pay for college. The Obama campaign is particularly keen on appealing to young voters this year. In 2008, he won 66% of 18- to 29-year-old voters - a percentage he would like to duplicate this year in his campaign against former Massachusetts governor Mitt Romney, the presumptive GOP presidential nominee.

Both parties broadly agree that the rate should be extended for one year, but they do not agree on how to pay for it. It is a scenario that has played out repeatedly in this Congress.

Republicans would pay for the cost of the loan extension by cutting funds from the Prevention and Public Health Fund (PPHF), a $15 billion fund created under the health care law to help states and localities pay for everything from anti-obesity campaigns to cancer screenings.

Congress already dipped into the fund to use $5 billion to pay for the payroll tax cut extension package earlier this year, but congressional Democrats opposed the student loan bill on Friday because they contend further cuts would undermine health care access, particularly to women.

Surrounded by female lawmakers, Minority Leader Nancy Pelosi, D-Calif., on Friday called the bill a "continuation of the assault on women's health" because the fund helps provide services to women, including mammograms and pregnancy-related care. Instead, Pelosi said Congress should pay for the loan rates by eliminating tax subsidies for oil companies.

Rep. Gwen Moore, D-Wis., accused Republicans of sexism in their fiscal policies. "We are seeing the sheer gender bias in this institution against meeting women's needs," she said. On the House floor before the vote, Boehner said accusations that Republicans were trying to cut women's health was "absolutely not true" and decried the tone of the debate. "People want to politicize this because it's an election year, but, my God, do we have to fight about everything?" he said.

Michael Steel, a spokesman for Boehner, noted that Pelosi was among the 147 House Democrats who voted for the payroll tax bill that included cuts from the same fund, and said Democrats were just trying to score political points. "Gender has nothing to do with this debate," said Steel, further noting that Obama's 2013 budget also included a $4 billion cut to the PPHF.

Democrats have found a potent attack against Republicans highlighting women's issues, sparked in large part by the national debate over contraception coverage and GOP efforts to reduce funds for programs like Planned Parenthood. A USA TODAY/Gallup Poll this month showed Obama leading Romney in a dozen battleground states based largely on a shift in women voters to the president's side.

The House-passed bill has given the GOP a counter-punch to Obama's attacks, but it stands no chance of passage. The Obama administration issued a veto threat on Friday even before the House passed it, and Senate Majority Harry Reid, D-Nev., opposes it.

Senate Democrats will vote May 8 on their legislation to extend the Stafford loan rates by closing a tax loophole that allows wealthy Americans making over $250,000 to skirt Medicare taxes on their earnings, which Reid's office said would save $6 billion over 10 years.

USA TODAY

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