What: All Issues : Education, Humanities, & the Arts : General Education Funding : S 1642. (Higher education reauthorization) Amendment by Brown of Ohio that would require the Secretary of Education to create a supplemental higher education loan program/On agreeing to the amendment (2007 senate Roll Call 273)
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S 1642. (Higher education reauthorization) Amendment by Brown of Ohio that would require the Secretary of Education to create a supplemental higher education loan program/On agreeing to the amendment
senate Roll Call 273     Jul 23, 2007
Progressive Position:
Yea
Progressive Result:
Loss

This vote was on an amendment by Sherrod Brown, D-Ohio, that would require the Secretary of Education to create a "federal supplemental loan program" for full-time undergraduate and graduate students that would be designed to compete with private loans. The amendment was offered to a bill that would reauthorize the law governing many federal higher-education and financial aid programs.

Brown said he was spurred to act by a letter from one of his constituents outlining how her daughter ended up paying more than $75,000 in interest on a $25,000 college loan managed by a private lender that set the loan's interest rate at 18 percent. Congress spent part of 2007 grappling with how to deal with the imbalance between the government's lower-interest student loans and those obtained on the private market, often at astronomical interest rates.

"I have shown this statement to a loan officer at a bank and also to my attorney. They both expressed to me they had never seen anything such as this and there must be a mistake. Unfortunately, the only mistake is Congress has failed to act to restrain the costs of these loans, which as we have seen, can carry interest rates sometimes in excess of 18 percent," Brown said. "It is not an isolated problem. Private loans have been growing at an annual pace of some 27 percent, meaning that because tuition continues to grow at a rapid rate, and the Federal Government has not met .. that increase."

Mike Enzi, R-Wyo., said Brown's amendment would place setting interest rates for these new federal loans into the hands of the Secretary of Education, who "is not the person with the expertise to know what kind of interest rate ought to be charged on anything." Enzi also said Brown's amendment had not been through the proper committees on Capitol Hill, and that as a result members of the Senate had not had enough time to examine its impacts.

Enzi also produced a letter signed by the American Association of State Colleges and Universities, U.S. Public Interest Research Group, and the United States Student Association, opposing Brown's amendment. The letter said the three groups opposed the amendment because it would remove all federal loan limits, which "may allow states to pass on more of the cost of college to students."

By a vote of 37-54, the Senate rejected Brown's amendment. Every Republican present voted against the amendment. Most Democrats voted for it (including the most progressive senators), though seven voted against it. Thus, the measure went forward without language that would have established a new federal student loan program intended to better compete with private lenders.

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