(Washington, D.C.) – Today U.S. Senator Patty Murray spoke on the Senate floor in her ongoing efforts to protect students and taxpayers by ending a wasteful student loan subsidy.
Last week, Murray offered an amendment in the Senate Appropriations Committee to finally end a subsidy that allows lenders to claim 9.5 percent interest rates on certain student loans – far above today’s interest rates. The subsidy was supposed to have ended in 1993, but instead more of these overpriced loans are being created today, costing taxpayers $1 billion a year. Murray wants to close the loophole and direct the savings to help more students afford college.
Last week, Murray’s amendment was defeated on a party-line vote in the Appropriations Committee. Continuing her effort, today she spoke on the Senate floor with Senator Edward Kennedy about the need to end the subsidy immediately.
“This year, we are throwing away a billion dollars that we could be using to help more students go to college,” Murray said. “Students should come before special interests. Student loan programs were started to help students – not to line the pockets of lenders. It’s time to finally end this runaway subsidy and do more to help our students afford college.”
While some on the Appropriations Committee said the problem should be addressed later, Murray called for immediate action.
“I am not willing to waste another dollar that could be in the pockets of students, and that is why the Senate needs to act now. The government is paying 30 times more than it should for these special interest subsidies. That’s a rip-off.”
Murray said, “The clock is ticking, and every member of this Senate will have to decide if they stand with students, families and taxpayers, or if they stand with the special interest. Millions of students and their families are waiting for your answer.”
Murray’s full remarks follow:
Mr. President, I talk with families from all over Washington State who are struggling to pay for college for their kids, and they all agree that a college education is far too expensive for many families. Now, you would think that the federal government would be doing everything possible today to make college more accessible for all families, but sadly that is not the case.
Last week, here in the United States Senate, we had a chance to help students get to – and through – college. Unfortunately, the Majority on the Appropriations Committee blocked my common sense, student-friendly proposal. Instead of standing up for students, unfortunately the committee stood up for banks and other special interests who have been “gaming the system” for years at taxpayer expense.
Mr. President, I’m on the Senate floor today to say that students should come before special interests. Student loan programs were started to help our students. They were not started to line the pockets of lenders. It’s time to finally end this rip-off and do more to help our students afford college.
Mr. President, back in the 1980’s, interest rates were high. Many people were concerned that lenders would stop making student loans, so Congress created a temporary — and I emphasize temporary — measure to keep college loans affordable for our students. And at the time, it worked. Lenders kept making loans, and students were able to afford college loans.
This was supposed to be, as I said, a temporary measure. In fact, it was supposed to be phased out in 1993 when interest rates were coming down. Interest rates came down, but this subsidy lived on. And for the past 11 years, taxpayers have paid these lenders far more than they should have.
Mr. President, taxpayers are actually subsidizing profitable companies to make loans that are far above today’s interest rates. Clearly, taxpayers are paying a huge bill while special interests are taking the money to the bank. Who’s paying the price? Our college students. This year, we are throwing away a billion dollars that we could be using to help more students go to college.
So in the Appropriations Committee last week, I offered an amendment to finally stop this taxpayer rip-off. My amendment would have used those savings from this rip-off to help 700,000 students get another $3,000 for college. It would have helped another 25,000 low-income student parents get child care on campus. It would have helped another 200,000 students get $800 in grants, and it would have helped 180,000 low-income and first generation students prepare for college through TRIO and Gear UP, and help thousands of migrant students attend college.
When I offered my amendment, everyone on the committee seemed to agree that this subsidy should end. But when it came time to vote, every Republican member voted against my amendment. They voted against taxpayers. They voted against students, and they voted against our families.
They said they want to deal with it later. I’m here today to say that taxpayers are getting ripped off every day we delay.
If we wait six months, taxpayers will lose billions of dollars, and students will not get the help they need. The time to do this is now. I am not willing to waste another dollar that could be in the pockets of students today, and that is why the Senate needs to act now. The government is paying 30 times more than it should for these special interest subsidies. Thirty times more. That is a rip-off.
It’s like if you walk into a college bookstore, and a textbook on the shelf costs $100. If that textbook had the same outrageous mark-up as these loans, that student would pay $3000 for that same textbook. Taxpayers are paying $3000 for something that costs only $100 because of this runaway subsidy. That is outrageous. There is no reason for taxpayers to be paying a mark-up of 30 times the real cost.
We were all outraged when Haliburton charged taxpayers $45 for a case of soda that sells for $7 at the supermarket. Haliburton marked up the price six times. Today, lenders are marking up student loans 30 times. No wonder the Washington Post called this a scandal. I ask unanimous consent to insert this Washington Post editorial into the Record. I also ask unanimous consent to insert the New York Times editorial from today.
We have to stop overcharging the American people. We still have time to help students this year. But I will warn the Senate, the clock is ticking and every member of this Senate has to decide if they stand with students, families and taxpayers, or if they stand with the special interests.
Millions of students and their families are waiting for this answer. We have to stop the special interest subsidy today.
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