[Congressional Record Volume 153, Number 14 (Wednesday, January 24, 2007)]
[Extensions of Remarks]
[Page E186]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE COLLEGE STUDENT RELIEF ACT OF 2007

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                               speech of

                          HON. PETER HOEKSTRA

                              of michigan

                    in the house of representatives

                      Wednesday, January 17, 2007

  Mr. HOEKSTRA. Madam Speaker, I rise today to speak in opposition of 
H.R. 5.
  Today we are considering the College Student Relief Act of 2007. 
Democrats have claimed that this legislation will provide relief to 
students going to college. However, what they have done is propose a 
classic bait and switch.
  This bill will not improve access to higher education for low- and 
middle-income Americans nor will it provide relief for students in 
college today. This relief, when fully phased in, will benefit college 
graduates for only 6 months.
  H.R. 5 reduces interest rates for only undergraduate subsidized loans 
over 5 years from 6.8 percent to 3.4 percent.
  By the time the interest rate is cut in half, the 3.4 percent 
interest rate is only in effect for half a year. The student loan 
interest rate goes back to 6.8 percent permanently starting January 1, 
2012. In other words, it snaps back just 6 months after it is fully 
phased in at a cost of $7 billion.
  The reality of the situation is that the Democrats could not follow 
through on their campaign promise to cut interest rates in half because 
they couldn't pay for it.
  So first they narrowed the field down to one subset of student loans. 
Then, they phased the rate cut in. Then, they ended it after 5 years. 
What is left is this ``bait and switch'' benefit that will expire in a 
mere 6 months after it is fully phased in.
  Democrats have talked about improving access to higher education for 
lower- and middle-income Americans. H.R. 5 does not provide relief to 
college students seeking to pay their tuition. It does not do anything 
to get more students into college.
  This bill provides a back-end benefit to college graduates instead of 
a front-end benefit for those trying to get in the door of a 
university.
  The bill will not help a single graduate student saddled with a heavy 
financial burden.
  H.R. 5 is a boon to the Direct Loan Program. The Direct Loan 
Program's market share has fallen to 22 percent because schools have 
chosen FFEL. Cutting FFEL lenders is the only way to increase the 
competitive position of direct lending, a program that is withering on 
the vine through the voluntary attrition of colleges.
  CBO estimates that cutting interest rates will cost taxpayers more 
than $7 billion. In order to off-set the cost, the proposal before us 
will cut government payments to loan providers. While reducing lender 
payments, I'm concerned that rate reductions, fee waivers, loan 
forgiveness and other benefits will be taken away from students seeking 
higher education loans.
  Lowering interest rates for borrowers could result in schools 
increasing tuition. If that is the result, borrowers won't get any 
relief at all. The real issue is college cost, not student loan 
interest rates!
  During the 109th Congress, we enacted policies that reduced student 
loan fees by allowing students to consolidate with lenders that best 
met their needs. Origination fees were reduced and loan limits were 
also increased, allowing more students to gain access to much-needed 
financial aid.
  Supporting H.R. 5 will not help students achieve higher education 
affordability.

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