Patty Murray: “currently students are enjoying low interest rates on their loans. That was not always the case. In the 1980s, lenders…”

“currently students are enjoying low interest rates on their loans. That was not always the case. In the 1980s, lenders were promised a rate of return at 9.5 percent on their loans when interest rates were high, but we were trying to keep costs down for students. In 1993, when interest rates were coming down, extra payments to lenders on 9.5 percent loans were supposed to phase out. However, they did not start phasing out and were rapidly increasing until I took action with my colleagues to end this practice. Last year, I along with my colleagues, including Senators Kennedy and Durbin, who support closing this loophole passed the Teacher-Taxpayer Act. The Teacher-Taxpayer Act took aim at some of the most egregious abuse of this runaway subsidy and returned that money to student's pockets. However, while the Teacher-Taxpayer Act took great strides forward on this issue, the Federal government is still paying out $1 billion a year on the 9.5 percent loans. I believe we are far overdue in ending this practice. I have filed an amendment to fully and permanently end the remaining 9.5 percent subsidy loophole, which according to the Congressional Budget Office will provide a savings of approximately $500 million. I have stated my intent repeatedly to finally close the remaining loophole.…”