Lynn C. Woolsey: “I rise to discuss H.R. 5186, introduced by a number of Republican Members to address a billion dollar and growing…”

“I rise to discuss H.R. 5186, introduced by a number of Republican Members to address a billion dollar and growing windfall subsidy for student loan lenders. Like my Democratic colleagues, I will support H.R. 5186, because it is certainly better than current law. But on this issue, that is a pretty low bar. I believe that families who are struggling to pay college tuition deserve to know exactly how low my Republican colleagues have set that bar. Lenders recently have taken increased advantage of a provision in the Higher Education Act that guarantees them 9.5 percent in returns on certain loans. That is almost triple the rate of return on most student loans. In fiscal year 2004, that meant that $1 billion that could have helped hardworking Americans pay for college instead went into lenders' pockets. Democrats have been working to close this loophole for the last year, but Republicans did virtually nothing until public outrage reached the boiling point. Even now, the Republican bill would leave 40 percent of the billion dollar loophole open. They would rather that $400 million go to the lender profits than to Pell Grants or low-income students or to the teacher loan forgiveness that they include in 5186, and we all support. I do not agree. The Bush administration also has refused to close the loophole administratively, even though the nonpartisan Government Accountability Office found the administration has the authority to absolutely do so.”