Washington — It’s up to Rep. Joe Courtney to round up votes in the House this week for a bill that would limit future increases in student loan interest rates. The bill was approved last week in the Senate.
Courtney, Connecticut’s 2nd District Democrat, has tried for years to keep interest rates low on the popular Stafford loans that help thousands of students afford college.
Democratic House leaders are now tapping that expertise.
House Minority Leader Nancy Pelosi last week called Courtney “the leader in the House on the subject on [the Democratic] side.” And House Democratic Whip Steny Hoyer, D-Md., tapped Courtney last week to explain the student loan bill to House Democrats.
As he lobbies his Democratic colleagues, Courtney has a tough job. He’s trying to sell a bipartisan compromise reached in the Senate that’s similar to legislation House Democrats rejected in May.
The bill approved by a Republican majority in May tied loan interest rates on the popular Stafford loans to the 10-year Treasury note.
The Senate-passed version, which received White House backing, resembles the House bill but caps interest rates at a lower level, and doesn’t allow rates to fluctuate over the life of a loan.
“The most important borrower protection which was incorporated into the compromise is that families who are taking out loans will have their loans fixed for the whole term of the loan, and that’s a huge difference from the House Republican bill,” Courtney said. “The numbers are better, the rate’s lower …there’s a lower cap.”
Pelosi said, “it isn’t the bill we would have written, but it is a bill that can pass and will have Democrats for and against.”
House GOP leaders indicated they will put a new student loan bill on the floor for a vote this week, most likely on Wednesday.
It’s important for Courtney to find Democratic votes for the student loan bill because it’s likely the House will take up the bill under suspension of the rules, a fast-track procedure that would require two-thirds support for passage.
Meanwhile, it’s unclear how much support for that bill Courtney will muster from the Connecticut House delegation.
Elizabeth Kerr, press secretary to Rep. Jim Himes, D-4th District, said Friday she doesn’t know how the lawmaker will vote. She said Himes was out of the country on a trip with Intelligence Committee members, and was not available for comment.
There was no immediate response from the offices of Reps. Rosa DeLauro, D-3rd District, or Elizabeth Esty, D-5th District.
But Courtney has won the backing of Rep. John Larson, D-1st District.
“While clearly improvements can be made, we should move this forward to provide immediate relief for our students,” Larson said.
As far as the other Connecticut lawmakers, Courtney said, “They are trying to digest it, it’s a compromise with negatives and positives.”
A law that kept the previous rate of Stafford student loans for undergraduates at 3.4 percent expired July 1, at which point interest rates doubled, to 6.8 percent.
The deal considered by the Senate would lower rates for undergraduates to 3.8 percent. Graduate students and parents borrowing money for their children would have higher interest rates, 5.4 percent and 6.4 percent respectively.
Connecticut’s senators called this a “teaser” rate, noting that the rate would rise as interest rates rise to a point where students could no longer afford to pay back their loans.
Connecticut’s two Democratic senators, Richard Blumenthal and Chris Murphy, were among 18 senators who voted “no” on the student loan bill.
They also objected to the federal government’s profiting from the loans. A Congressional Budget Office estimate said the student loan bill approved by the Senate would bring the Treasury more than $715 million over 10 years, with most of that money coming in the later years, when interest rates were projected to be higher.
Supporting the Senate’s student loan bill is a bit of a political stretch for Courtney, who for years introduced bills that would freeze Stafford loan rates at 3.4 percent.
But Courtney said his support for the Senate deal comes “with the determination to revisit the issue” when Congress takes up the next higher education reauthorization bill, possibly next year.
“This bill is not the Ten Commandments. It’s not something that Congress can’t revisit,” Courtney said.
Meanwhile, Connecticut college officials are concerned that students will face loans with a 6.8 percent interest rate as they begin to register for fall courses unless Congress acts quickly.
“This is better than what was going to happen because rates were going to go up astronomically. So this deal is a better deal for students, even though you don’t know what will happen down the road, ” said Elsa M. Núñez, president of Eastern Connecticut State University and vice president of Connecticut’s state college and university system.