[Congressional Record Volume 148, Number 3 (Friday, January 25, 2002)]
[Extensions of Remarks]
[Page E30]
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

                       Thursday, January 24, 2002

  Mrs. MINK of Hawaii. Mr. Speaker, I rise today in support of 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 higher 
education, regardless of their financial background.
  S. 1762 represents a compromise between those representing 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. S. 1762 preserves the current interest rate 
formula that determines how much lenders receive from the Federal 
government, while locking in very low interest rates for students. I 
applaud the representatives of students and lenders for working 
together on a difficult, complex issue, to find a solution that keeps 
loans available and affordable for disadvantaged 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 shifting 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.
  For low-income students especially, student loans represent a life-
line to a college degree that is often beyond the reach of a family's 
resources, grants and scholarships. Student loans help bridge a gap for 
low-income students and provides them the same opportunities to earn a 
living commensurate with their abilities.
  Mr. Speaker, S. 1762 is a good bill and 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. And higher education is a 
smart investment, especially for low-income students, with earnings 
from a bachelor's degree far exceeding earnings from only a high school 
degree. S. 1762 will mean that more students, especially more low-
income students, can go on to college and will be more able to 
participate in the 21st century economy, and I strongly support it.

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