[Congressional Record Volume 141, Number 172 (Thursday, November 2, 1995)]
[Extensions of Remarks]
[Page E2105]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               STUDENT BORROWERS TO PAY HIGHER LOAN COSTS

                                 ______


                        HON. WILLIAM (BILL) CLAY

                              of missouri

                    in the house of representatives

                       Thursday, November 2, 1995

  Mr. CLAY. Mr. Speaker, House Republican estimates of the cost savings 
from eliminating the grace period interest subsidy for student loan 
borrowers grossly understate the actual out-of-pocket costs to 
students. The $3.75 billion figure that CBO arrived at shows the 
savings to the Federal Government, and not the cost to students. The 
impact on students is much, much worse.
  Student borrowers will pay, out-of-pocket and over life of their 
loans, $8.31 billion more in loan payments than they would under 
current law. If you add to that amount the impact of the 30 percent 
increase in the interest rate on parents' loans, middle-class families 
will pay an extra $9.2 billion in college costs.
  These cuts are terribly unfair. Not only do Republicans make it more 
difficult for children from middle-class families to attend college, 
Republicans use the savings to finance their tax cut for the rich.
  House Republican conferees should pledge today to protect students 
and parents from higher college costs. House Republicans should drop 
their proposal to eliminate the grace period interest subsidy and to 
raise the interest rate on parents' loans. Ninety-nine Members of the 
Senate last week voted to drop virtually identical provisions from 
their proposal. Republicans should come to their senses and stand with, 
and not against, students and parents.
  Conferees should also retain the direct lending program to keep 
choice and competition in the student loan system. Members need only 
read their mail to know that the students and parents who use it like 
it.

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