Heidi Alexander: “I would say to the Senator through the Chair, she is correct. The idea of this is instead of Congress playing political…”

“I would say to the Senator through the Chair, she is correct. The idea of this is instead of Congress playing political ``fix it'' during every election, we have turned this into a sort of doc fix where we are treating students the same way we treat doctors who serve Medicare patients. We run in here and have a big political fight about what we should be paying. Instead of doing that, we have a permanent solution that is based on what the market rate actually is. We say whatever it costs the government, whatever it costs the taxpayer, we loan it to the students at that level. The Senator is correct; if it costs the government more to borrow the money because the rates are higher that year, the rate will be higher that year. But there is the 8.25-percent cap. Throughout the history of the student loan program, there have been caps in the past. There was a 10-percent cap for about 15 years. There was a 9-percent cap for about 20 years. If the Senator is suggesting there be a cap on the loan at a lower level than that, then the Senator will have to raise a lot of money. For example, if we had a 6.8-percent cap on all loans going forward, my guess would be that it would cost $50 billion or $60 billion over a 10-year period of time. I do not know where we will get that money. So the President made the proposal that we have a permanent solution. He suggested that we take the amount of money--ask the Congressional Budget Office. This is not some Republican or Democratic figure.…”