Under threat of a presidential veto, Congress passed a bill Friday to prevent the Stafford Student Loan interest rate from doubling, which would affect more than 10,000 University of Wisconsin students, by repealing a health care program.
According to a summary, the bill would extend the 3.4 percent interest rate on Direct Stafford Student Loans given to undergraduate students from July 1, 2012, to July 1, 2013, preventing the interest rate from doubling to 6.8 percent.
To accomplish this, the bill would repeal provisions in the Patient Protection and Affordable Care Act passed last year that establish and appropriate funds to the Prevention and Public Health Fund, a program designed to not only improve public health but restrain the growth rate of private and public sector health care costs.
According to the roll call vote, the bill passed the House of Representatives 215 to 195, with 202 Republicans voting for it along with 13 Democrats. Thirty Republicans and 165 Democrats voted against the measure, while 22 congressmen did not vote.
“I was encouraged we could come together today to prevent a doubling of the interest rate on federal student loans for one year as a temporary respite for the millions of young Americans who are unable to find work in one of the worst job markets in decades,” U.S. Rep. Sean Duffy, R-Wisconsin, said in a statement.
According to a White House statement, if President Barack Obama is presented with the bill, his senior advisors would recommend the veto. The statement referred to the bill as a “politically-motivated proposal” and not a “serious response” to the problems facing college students.
Bill Murat, a spokesperson for U.S. Rep. Tammy Baldwin, D-Wisconsin, said Baldwin voted against the provision despite her strong support of holding down student interest rates. He said the decision would take away preventative health care, particularly in the area of cancer screenings.
Another version of the bill is in the Democratically-controlled Senate that would cover the cost of keeping the student loan rate down by paying for it through changes in how corporations are taxed, Murat said.
He said most likely a conference committee between the Senate and the House of Representatives will have to convene to work out the difference between the two bills. He said the committee would hopefully reach an agreement by July 1 to prevent the rate from doubling.
The 2010-2011 UW Data Digest shows during the 2009-10 academic year, 11,960 students on campus received roughly $65 million in Federal Subsidized Stafford Loans, an increase in 879 students from the 2008-2009 academic school year.
UW Associate Director of Student Financial Aid Michelle Curtis said they would like Congress to continue offering student loans at the lowest interest rate but not have them pay for it by cutting other types of financial aid, like what the government did to help sustain Pell Grants.
She said Congress is “chipping away” at other student aid programs as well. Curtis said it would also be in the best interest for students to extend the interest rate beyond a one-year period.
“It’d be nice to have the rate lowered for a long time, but we’ll take what we can get,” Curtis said.
