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The Bill: H.R. 5
Date Passed: Jan. 17, 2007; 5:35 pm
About: This bill would drop the interest rate on federally-subsidized student loans from 6.8 to 3.4 percent over five years. At a time when tuition costs continue to rise, and student reliance on loans grows, this is a welcome piece of legislation, and, like many of the bill's supporters, we hope that it is one part of a larger body of legislation to help Americans afford undergraduate education, at the very least.
In the 2003-04 school year, the average amount borrowed by undergraduate students was $5,800, according to the National Center for Education Statistics -- that's a $23,200 total if the student is lucky enough to finish in four years. And that's only for an undergraduate education. As graduate studies become more necessary to gain an edge in a hostile job market, many students are coming out saddled with student loan debt upward of 50, 60, or even 75 thousand dollars. And what for? If you go for something "useful," like engineering, finance or law, you'll likely command a high salary. But what about the people I know -- the philosophy, social work, journalism, or sociology grad students? You're looking at a lot of work, a low salary, and a difficult time paying back that loan debt.
Here in New Jersey, as City Belt and countless other outlets have reported, the budget of Rutgers continues to be cut, year after year. And next year, the university will surely be cut again. So there are fewer grants and scholarships available from the state, tuition and fees increase each year, and students continue to rely even more heavily on student loans.
So why would Rep. Scott Garrett be New Jersey's only Congressman to vote, along with 70 other Congressional Republicans, against this slight lessening of the financial burden of education?
Here are some excerpts from his floor speech opposing the legislation:
"The truth is that H.R. 5 does nothing to address tuition costs for
students and could actually end up making college even more expensive."
- True, the bill does nothing to address tuition costs. But that's besides the point, isn't it? It's relief, in some form, for those who have taken out all of these loans to address tuition costs in their own way. If the Congress could figure out a way to deal with the rising tuition costs, more power to them. But H.R. 5 doesn't hurt students, as Garrett is implying. As for the increased cost that Garrett says H.R. 5 will bring on, he later argued that the bill will "exacerbate perverse incentives already at play with regard to government subsidies for student loans." He is making a classic free-market assumption -- akin to the mythical "Cadillac-driving Welfare Queens" of Welfare "reform" -- that an institution (or individual) aided by the government is just going to hoard that aid.
"The only students who will be fortunate enough to reap the full benefits of this proposal are those who take out their loans during the small 6-month window from July 1, 2011 to January 1, 2012. Before that date, the promise of halving the interest rates is unfulfilled. And, after that date, the interest rate will again double."
While technically correct, Garrett misleads and makes a big assumption in this statement. Sure, the only students who will get the "full benefits" are those that he refers to. But the rate will be lower for any students between now and then, and I'm not sure how that's a bad thing. And when he says that "after that date, the interest rate will again double," he's assuming that Congress will not renew the legislation before then (2011 is when this bill will expire if not renewed).
To us, this just seems like a weak argument against a pretty common-sense, pocketbook-issue piece of legislation. So why else could Garrett be against it? Maybe it's that $307,155 that he's taken in contributions from the financial, credit card, and banking industries over the past 18 years?
Garrett's office was not available for comment.
They Voted For It:
Robert Andrews (D-1)
Frank LoBiondo (R-2)
Jim Saxton (R-3)
Christopher Smith (R-4)
Frank Pallone, Jr. (D-6)
Mike Ferguson (R-7)
Bill Pascrell, Jr. (D-8)
Steven Rothman (D-9)
Donald Payne (D-10)
Rodney Frelinghuysen (R-11)
Rush Holt (D-12)
Albio Sires (D-13)
They Voted Against It:
E. Scott Garrett (R-5)
How They Voted is a regular City Belt feature breaking down how New Jersey’s congressmen voted on the bills we think are important.
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