[Congressional Record Volume 141, Number 86 (Tuesday, May 23, 1995)]
[House]
[Pages H5381-H5382]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                ELIMINATE THE IN-SCHOOL INTEREST SUBSIDY

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Florida [Mr. Weldon] is recognized during 
morning business for 5 minutes.
  Mr. WELDON of Florida. Mr. Speaker, I would like to address the issue 
of the Republican proposal to eliminate the in-school interest subsidy. 
There is going to be a lot of rhetoric and dialog, and I think the air 
needs to be cleared as to exactly what is going on with this issue. I 
can get up here and say that I was a student who took advantage of the 
student loan program and the in-school interest subsidy. Though I 
worked my way through college in order to help get through medical 
[[Page H5382]] school, I took out 10,00 dollars' worth of loans while I 
was a medical student.
  I was very pleasantly surprised to discover that when I finished 
medical school and when I finished my internship and residency, that I 
still only owed $10,000, that the interest of 7 percent per year had 
been picked up by the U.S. taxpayer. Indeed, I was very happy to find 
that out because once I got out of medical school and my internship and 
residency, I got myself a pretty good job and $10,000 was fairly easy 
to pay off.
  That, indeed, is the essence of the problem with the Democrat 
proposal of continuing the in-school interest subsidy.
  Let us just say, if I had daughters, they were twins. And one wanted 
to go to school to become a hairdresser and it took her 1 year. And she 
wanted to take out a $5,000 loan to do that. And then I had another 
daughter who wanted to go through 4 years of college and 3 years of law 
school and wanted to borrow $5,000 a year to do that. Well, guess what? 
My daughter who went to school to be a hairdresser would be paying 
through her taxes the in-school interest subsidy on my other daughter 
who wants to accumulate a $35,000 loan and then get out and become a 
wealthy attorney.
  We, Republicans, are making a proposal that these students pay that 
in-school interest subsidy in the form of added principal when they 
graduate. This may sound like an onerous, terrible burden to place on 
our college students and our professional career students when they get 
out of law school or medical school, but the truth is, Mr. Speaker, 
that the average increase in the size of that student loan will roughly 
be equivalent to their cable bill. It will be about $27 a month, the 
average student will have to pay in extra costs on their student loan, 
not exactly what I would consider to be an onerous burden to place on a 
student who has a great likelihood of making a fairly good income, a 
substantially better income than the average person who goes out there 
and works when they get out of high school.
  Mr. Speaker, this proposal of the Republicans is a fair proposal, but 
probably more importantly, one of the best reasons why this is a good 
proposal is we do not have the money to pay for this. We have to borrow 
the money to pay those interest payments for those college students. 
Indeed, these college students, when they get out and those who have 
had their student loan interest paid, it has been paid in the form of 
added Federal debt. Those students, when they get out of college, will 
have more debt to pay off in the form of an added debt burden.
  Mr. Speaker, our proposal, the Republican proposal, is a logical 
proposal. It is a fair proposal. And, indeed, it is a proposal that 
asks the people who are most able to pay to pick up the tab. But we are 
going to hear a lot of rhetoric about this being something that is bad 
and evil, but, Mr. Speaker, it is fair. It is logical. It makes sense. 
It is something that is badly needed. And I support the elimination of 
the in-school interest subsidy.
  I ask that all of my colleagues on both sides of the aisle do so so 
that we can help balance the budget and we can help create a better 
future for our children and our grandchildren.


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