[Congressional Record Volume 147, Number 178 (Thursday, December 20, 2001)]
[Extensions of Remarks]
[Page E2400]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   ESTABLISHING FIXED INTEREST RATES FOR STUDENT AND PARENT BORROWERS

                                 ______
                                 

                               speech of

                           HON. PATSY T. MINK

                               of hawaii

                    in the house of representatives

                      Wednesday, December 19, 2001

  Mrs. MINK of Hawaii. Mr. Speaker, I want to express my support for S. 
1762, which will provide students with low interest rates on Federal 
student loans, while preserving the health of the student loan industry 
by ensuring the current and future participation of lenders in this 
market. By helping lenders stay in the student loan markets, we are 
making sure that qualified students will have access to a higher 
education, regardless of their financial background.
  S. 1762 represents a carefully brokered compromise between those 
representing the needs and interests of students, and those 
representing the lending industry. This compromise essentially fixes a 
problem that would have arisen in 2003 in the student loan interest 
rate formula that, according to the lending community, would have dried 
up resources for students needing funds for college by potentially 
reducing returns for such loans below the cost of issuing such loans. 
The fix that was worked out preserves the current interest rate formula 
that determines how much lenders receive from the Federal government, 
while locking in today's very low interest rates for students.
  The formula will change in 2006 so that the interest rate students 
pay will be fixed at 6.8 percent, which is an historically low interest 
rate for students, and will eliminate confusion among borrowers of 
student loans regarding changing interest rates and formulas. With the 
changes in S. 1762, students benefit by getting guaranteed low interest 
rates, and by having the availability of funds for loans, and the 
stability of the student loan industry ensured.
  As I mentioned, S. 1762 is supported by groups representing students 
and lenders alike, as well as student financial aid administrators. We 
have received letters of support from the United States Student 
Association, the State Public Interest Research Groups, the National 
Association of Student Financial Aid Administrators, the American 
Council on Education, the Consumer Bankers of America, and the 
Education Finance Council.
  Passage of S. 1762 is crucial for ensuring the availability of funds 
for qualified students to go to college. As we know, more and more 
students are going to college these days, and more are doing so with 
the help of student loans. S. 1762 will mean that more students can go 
on to college and will be more able to participate in the 21st century.
  I urge a ``yes'' vote for S. 1762.

                          ____________________