Last week, the Democratic Party sent out a fundraising email that accused House Republicans of voting to double the interest rates on student loans. The scare tactic apparently succeeded, as earlier today the Democratic Congressional Campaign Committee sent out this email to its followers:
Subject: seriously, thanks!
Last week, we asked you to help us do something big, something truly record breaking.
Well, thanks to your generous support, we had our BEST online showing for May ever!
Your contributions are already being put to use, protecting access to affordable higher education. In fact, we just launched an ad campaign on college campuses across the country, calling out House Republicans for voting to more than double student loan rates. Our campaign has been featured on PBS, CNN, and ABC News — but we’re just getting started.
Will you condemn House Republicans for attempting to make college more expensive?
Stand by President Obama’s veto threat against Republican student loan hikes: Click here to automatically add your name >>
Thanks for all that you do,
So, did House Republicans actually “vot[e] to more than double student loan rates,” and “make college more expensive”? Of course not. The Democrats are just lying again. ABC News offers a balanced summary of what is going on with student loan interest rates:
What: Only interest rates on subsidized Stafford Loans will be impacted by the July change. Subsidized Stafford Loans are need-based loans for undergraduate students only. …
When: Interest rates on subsidized Stafford Loans issued after July 1, 2013 are set to double to 6.8 percent. Loans issued before this date will come with 3.4 percent interest, which is locked in for the life of the loan. …
Why: The 6.8 percent rate is actually the old interest rate for these loans. Congress passed a law back in 2007 that gradually lowered interest rates to 3.4 percent over five years, but allowed the rate to rise back to 6.8 percent in 2012. Everyone – President Obama, Republicans, Democrats – wanted to avoid that rebound, but couldn’t agree on how to do it. So they passed a stopgap measure that extended the 3.4 percet interest rate for a year. But that year is almost up and we’re at a familiar situation: everyone wants to prevent interest rates from rising uniformly to 6.8 percent, but they can’t agree on how to get there.
What House Republicans voted for is very similar to what President Obama has proposed:
Obama wants student loan interest rates to vary from year to year depending on market conditions. Interest rates for subsidized loans would be tied to the yield on 10-year Treasury bonds (plus .93 percentage points). Basically that means interest rates could initially be even lower than 3.4 percent, but they could rise much higher in coming years. …
Some Republicans have also called for varying interest rates based on the market. House Republicans recently passed such a bill. Like Obama’s plan, the interest rates on Stafford loans would be tied to the yield on 10-year Treasury bonds (plus 2.5 percentage points). Unlike Obama’s plan, the Republican plan would not offer better rates for subsidized loans than unsubsidized loans. … The Republican plan does cap how high interest rates could go, however, to 8.5 percent for Stafford loans.
My friend and congressman, John Kline, is one of the sponsors of the House legislation. He wrote an op-ed in the Rochester Post-Bulletin explaining the Republican proposal:
Last summer, debate about student loans reached a fever pitch thanks to a scheduled increase in the interest rate for subsidized Stafford loans made to undergraduate students. The president began touring college campuses, calling on Congress to prevent the increase that his own party set in motion in 2007.
As I said at the time, no one wanted to see interest rates double — particularly at a time when one out of every two college graduates was struggling to find a full-time job. But we need to move away from a system that allows Washington politicians to use student loan interest rates as bargaining chips, creating uncertainty and confusion for borrowers. …
With the Smarter Solutions for Students Act (HR 1911), which passed the House of Representatives with bipartisan support on May 23, we upheld that promise. This responsible legislation simply moves all federal student loans — except Perkins loans — to a market-based interest rate and builds upon a proposal put forth by President Barack Obama earlier this year.
Just like the president’s plan, our legislation will apply a market-based interest rate to all Stafford and PLUS loans, ensuring borrowers will be able to take advantage of today’s low rates. But unlike President Obama’s proposal, the Smarter Solutions for Students Act takes an additional step to protect borrowers against higher interest rates by imposing a fair and reasonable cap. Based on current market conditions, HR 1911 could lead interest rates to drop by as much as 2 percent for millions of Stafford and PLUS loan borrowers this summer.
So how do the Democrats try to justify their claim that House Republicans “vot[ed] to more than double student loan rates”? They don’t try to justify it. It is an absurd lie, easily recognized as such by anyone who has the faintest acquaintance with the issue. But the Democrats’ fundraising appeals are not directed to the well-informed. They are aimed at low-information voters who turn out for the Democrats in droves because they have no idea what is really going on, and are easily fooled. No doubt the “ad campaign” of which the Democratic Party boasted today will fool thousands, maybe millions, more.
What is remarkable about this is not that party operatives are willing to lie for money, but that not a single prominent Democrat has objected to the practice. Is there a single Democratic office-holder who is willing to criticize his party’s use of blatant lies to seek political advantage? The answer, so far, is: No. Not one.