DeSaulnier bill would lower student loan rates

Student loan borrowers would be able to refinance their interest rates at the rate offered to banks by the Federal Reserve, under a bill announced Monday by Rep. Mark DeSaulnier.

DeSaulnier, D-Concord, held an event at the University of California, Berkeley to roll out H.R. 3675, the Student Borrower Fairness Act, which would offset its costs by increasing corporate tax rates on companies that pay their CEOs or highest paid employees more than 100 times the median compensation of all employees.

Mark DeSaulnier“It is patently unfair that the same big banks that toppled our economy borrow from the federal government at extremely low interest rates while student borrowers are struggling to pay back their loans,” DeSaulnier said in a news release. “Meanwhile, people of all ages are buried in student loan debt which holds them back from being able to buy a car, purchase a home, save for retirement, or start a family. This bill is a first step toward making sure our students can emerge from under their piles of crippling debt and enter tomorrow’s highly-trained workforce.”

Congress acted on student loan rates in 2013, but the changes only applied to new borrowers.

UC-Berkeley Chancellor Nicholas Dirks applauded the bill. “College students and their families depend on student loans to access higher education,” Dirks said in the congressman’s release. “At Berkeley, we are proud that 61 percent of our undergraduates graduate without debt and the average debt of students who do borrow is only $17,584, much lower than the national average. This legislation would benefit all borrowers because it will help them manage their debt and repayment.”

James Donahue, president of St. Mary’s College of California in Moraga, said his college “is built on the idea that education has the power to transform lives. The Student Borrower Fairness Act will provide opportunities for all students to pursue their dreams of a higher education, and ultimately highly successful lives. Student loan debt is a national issue and reducing it must be a national priority.”

DeSaulnier’s office said outstanding student loans now total more than $1.3 trillion, surpassing total credit card debt. More than 37 million Americans have outstanding student loan debt, with an average outstanding balance of $29,400 for those who borrowed to get a bachelor’s degree. From 2004 to 2012, student loan debt rose an average of 14 percent per year.


Boxer leads call for student-loan justice for troops

U.S. Sen. Barbara Boxer this week led two dozen Senate Democrats in urging the student loan industry to ensure military service members have all the benefits that they’re entitled to by law.

Barbara Boxer “We were alarmed to learn that some student loan servicers are providing incomplete or inaccurate information regarding service members’ options for reducing their debt —often leading individuals to make decisions that have costly long-term consequences,” the senators wrote to Student Loan Servicing Alliance Executive Director Winfield Crigler. “In one particularly egregious example, a service member was guided toward a deferment plan that ended up increasing his total debt by $25,000. This is simply unacceptable.”

Boxer’s office noted about 41 percent of service members are now carrying student loan debt, and Defense Secretary Leon Panetta said last month that the main reason why troops lose security clearances is because of financial problems.

Congress in the past has enacted loan repayment protections and benefits — such as loan forgiveness programs and interest rate reductions — to help service members manage their debt. But a report issued last month by the Consumer Financial Protection Bureau’s Office of Servicemember Affairs found many military men and women are facing significant challenges in fully accessing these benefits. Specifically, it found that some student loan servicers aren’t providing clear, accurate information about available benefits or are forcing military borrowers to clear unnecessary hurdles in order to access the benefits they deserve.

“Our brave military men and women—and their families—make tremendous sacrifices each and every day in service to our nation. They should never have to fight for full access to the benefits they have earned, including student loan repayment protections,” the senators wrote.

Read the full letter, and a list of signatories, after the jump…
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Obama & Romney’s newest television ads

“Mitt Romney thinks that students should ‘borrow money’ from their parents to help pay for college or start a business, and under the Romney-Ryan budget, college aid would be cut for nearly 10 million students and the tax deduction for college tuition would be eliminated,” the Obama campaign said today in rolling out this ad. “President Obama, on the other hand, understands that a college education should be in reach for as many students as possible – and that’s why he has overhauled higher education financing by eliminating bank middlemen from college loans and used the savings to double funding for Pell Grants.”

The “Get Real” ad will air in Colorado, Iowa, Nevada, Ohio and Virginia.

“With every paycheck, Americans paid more and more into Medicare,” the Romney campaign said today in rolling out this ad. “Now, when you need it most, President Obama cut Medicare to pay for Obamacare. Mitt Romney and Paul Ryan will strengthen Medicare and protect the commitments made to current seniors.”


Boxer seeks political truce to pass vital bills

It’s time to put politics aside for a few weeks and pass some vital bills, U.S. Sen. Barbara Boxer told reporters on a conference call this morning.

Boxer, D-Calif., said partisan gridlock has brought Congress to record-low approval ratings and productivity.

“Things are really dismal but we have a window of time between now and the election,” she said, adding Senate Minority Leader Mitch McConnell, R-Ky., still seems pre-occupied mainly with ensuring that President Obama doesn’t win a second term. “We all are going to get out there and fight for our candidates… but not on the Senate floor. We need to come together and pass these important bills.”

Boxer identified four priorities. One, she said, is Moving Ahead for Progress in the 21st Century (MAP-21), the two-year surface transportation authorization bill that’s being heard in conference committee next Tuesday, May 8. This is the successor to SAFETEA-LU, the 2005 surface transportation funding bill, which expired more than two and a half years ago; that earlier bill’s latest extension is up at the end of June, so time is of the essence, Boxer said. She said the bill has no earmarks and is revenue-neutral, but would create or save about 3 million jobs nationwide, about a tenth of which are in California.

“This is the only jobs bill that we can pass this year, in my opinion,” she said.

Another priority is legislation to ensure that the interest rate on student loans doesn’t double to 6.8 percent on July 1. The Republican-controlled House has passed a bill to extend the lower rates for a year, paid for by eliminating funding for a preventative health care fund established under the Affordable Care Act; the Democrat-controlled Senate has proposed paying for it instead by eliminating tax loopholes for shareholders of certain small corporations.

A third priority is reauthorizing the Violence Against Women Act, an anti-domestic-violence measure that expires in September, Boxer said. The Senate passed its version – which would expand the law’s funding and protections for same-sex couples, immigrants and tribal communities – last week with bipartisan support, but House Republicans are working on their own version of the bill without those updates.

And Boxer said Congress must move to pass the Paycheck Fairness Act, which would bar employers from retaliating against workers who share their salary information with co-workers – a means of uncovering salary discrimination. The House passed a version of this in 2009, but it was filibustered in the Senate, she said.

“It’s time to get things done right this second, there’s not a minute to waste,” she said.


Local Dems running hard with student-loan issue

Democrats are running hard with the student-loan issue, including some efforts here in the Bay Area.

The interest rate on need-based student loans will double to 6.8 percent July 1 unless a law is passed. Both sides of the aisle appear to favor freezing the interest rate, yet each side is using the question of how to pay for it against the other as a political issue.

The House last week passed Republicans’ HR 4628 to maintain the rate at 3.4 percent for another year, paid for by eliminating the Prevention and Public Health Fund created by the Affordable Care Act health care reform law. Democrats say the GOP has set up a false dilemma by cutting flu vaccines, cancer and heart disease screenings and other services for children and families.

The White House has threatened a veto, but the bill isn’t expected to get past the Democrat-controlled Senate, anyway. Majority Leader Harry Reid, D-Nev., has introduced S.2343 to pay for freezing the interest rate by making it harder for owners of so-called S corporations to avoid paying Social Security and Medicare payroll taxes on some of their earnings.

The Senate might consider Reid’s bill Monday, so politicians are hitting the streets and phones to drum up support.

Rep. Barbara Lee, D-Oakland, will be joined by UC Berkeley Chancellor Robert Birgeneau, Mills College President Alecia DeCoudreaux, Holy Names University President William Hynes, and Cal State East Bay President Leroy Morishita for a news conference tomorrow morning at Cal’s Haas Pavilion.

U.S. Sen. Barbara Boxer, D-California, will address this and other issues during a conference call tomorrow with reporters.

And Rep. Zoe Lofgren, D-San Jose, will attend a rally Thursday morning at San Jose State University with local students who’ll discuss how the interest-rate increase would affect them. An estimated 7.4 million students nationwide, including more than 570,000 in California, would pay an average of $1,000 more over the life of their loans.

UPDATE @ 4:25 P.M. WEDNESDAY: Rep. Anna Eshoo, D-Palo Alto, was banging the drum today at Foothill College in Los Altos Hills, while Rep. Mike Thompson, D-Napa, did so at Sonoma State University in Rohnert Park.


Angry words over student loan interest bill

The House today voted 215-195 to pass HR 4628, which extends lower student-loan interest rates for a year by eliminating a preventative care fund created by President Obama’s health-care reform law.

The White House has threatened to veto the bill, but it won’t come to that: It’s dead on arrival in the Senate, where Majority Leader Harry Reid, D-Nev., has advanced a plan to pay for extending the lower student-loan rates by levying taxes on those who make $250,000 or more per year from certain small “S corporations,” private businesses that don’t pay corporate taxes. House Democrats had wanted to pay for it by ending subsidies to oil and gas companies.

Here’s what Rep. Barbara Lee, D-Oakland, said on the House floor before today’s vote:

“Mr. Speaker, I’m here today to speak out against H.R. 4628, the so-called Interest Rate Reduction Act.

“It is clear to me that Republicans are not serious about addressing the student loan interest rate hikes, with this so-called Interest Rate Reduction Act. Their bill is a wolf in sheep’s clothing, and would permanently end the Prevention and Public Health Fund, a key component of the Affordable Care Act that promotes wellness, prevents disease, and protects against public health emergencies.

“This prevention Fund is the first mandatory funding stream dedicated to improving public health – and it is extremely important in our fight to prevent chronic diseases, including HIV/AIDS, in Women’s health.

“This is such a sad and sinister ploy. Instead of pitting student loan relief for middle and low-income families against critical preventive services for middle and low-income families, we should be working toward real solutions. Instead of paying for subsidies to big oil, we should invest in our students, who are our future.

“This bill jeopardizes the health of our nation and it uses our students as pawns. And it is morally wrong. I hope we defeat this insincere proposal.”

After the vote, House Speaker John Boehner, R-Ohio said:

“Students and families are struggling in President Obama’s economy. Nearly half of college graduates are unemployed or underemployed, and laws like ObamaCare have only made it harder for small businesses to hire them. That’s why House Republicans voted to extend current student loan rates and to pay for it by eliminating an ObamaCare slush fund President Obama himself proposed cutting from his budget. It’s time for the president and Democrats in Congress to stop exploiting the challenges facing young Americans for political gain, and start working with Republicans to create a better environment for private-sector job growth.”

But, from Rep. George Miller, D-Martinez, the ranking Democrat on the House Education and the Workforce Committee:

“Today’s vote shows that the Republicans are on very thin ice on this issue, barely being able to pass their bill, and by less than a majority of the House. They should join us now on a bill to lower the loan rates and pay for it in a way that does not harm middle class women and children.

“Republicans call the Prevention and Public Health Fund a ‘slush’ fund. That’s amazing. Breast and cervical cancer screenings are not things you pay for with a slush fund. You don’t immunize children from infectious disease with a slush fund. You want know what a slush fund is? A slush fund is the tax loophole Republicans are protecting for the five largest oil and gas companies making record profits. That’s a slush fund.”