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Washington - With 12 days until the interest rate is set to double on new federally guaranteed student loans, U.S. Rep. Joe Courtney, D- 2nd District, told conference-goers here Monday that he is hopeful Congress will pass some version of his bill to avoid the rate hike.
If lawmakers do not act, the interest rate on subsidized Stafford Loans for the 2012-13 academic year would jump from 3.4 percent to 6.8 percent July 1, returning to its earlier level. A 2007 law, now expiring, gradually reduced the interest rate on this type of loan, which is offered to low- and moderate-income undergraduates.
In an interview with The Day, Courtney said he sees reasons for optimism in a recent proposal by Senate Majority Leader Harry Reid, D-Nevada, that identifies a new and, hopefully, less controversial way involving pension fund payments to offset the $6 billion cost of keeping the current rates for another year.
When Reid's idea was presented earlier this month "it was basically greeted by silence," Courtney said, "which was a good thing, because it wasn't rejected out of hand like the different versions that preceded it."
Courtney introduced the initial version of the legislation that would have permanently kept the interest rate at 3.4 percent. Keeping the rate is projected to save more than seven million college students about $1,000 over the life of their student loan.
If the rate increase does happen, it would not affect existing student loans.
Courtney was one of six featured speakers Monday afternoon at a panel discussion on college affordability during the Take Back the American Dream conference. The conference was held at the Washington Hilton hotel and hosted by the left-wing advocacy organization, Campaign for America's Future.
The student loan rate bill is one of Courtney's highest-profile efforts of his 5½ years in Washington. And for the progressive activists at Monday's conference, the Connecticut congressman was greeted as hero on a key national issue.
The bill has become a priority for President Obama, who repeatedly warned about the looming student loan rate increase during a barnstorm tour of college campuses this spring. The president told an audience at the University of North Carolina in Chapel Hill that "stopping this from happening should be a no-brainer … it shouldn't be a Republican or a Democratic issue. This is an American issue."
Courtney submitted his bill late on Jan. 25, the night of President Obama's State of the Union address. He said he was given a heads-up that the president would mention the July 1 rate increase, and so he hurried to prepare the legislative fix he had planned to introduce.
"I literally walked back to my office," Courtney recalled of the night of the address. "We had the bill teed up and ready to go."
However, Courtney said Monday that the bill was "going nowhere" in the Republican-controlled House until a student-led petition drive with 130,000 signatures helped prompt the White House to see the benefits of such legislation.
The congressman has since spoken nearly two dozen times on the House floor to urge the bill's passage. Each time he brings with him a giant poster counting down the days to the July 1 deadline.
"This work schedule by the Republican leadership would make Homer Simpson blush," Courtney said in a June 8 speech, bemoaning a congressional recess.
"It is time for us to go to work and find a compromise."
"This issue wouldn't have the profile it has without Joe," said U.S. Rep. Chris Murphy, D-5th District. "It has now become a priority for everyone, from the president on down. But Joe was talking about this before anyone else was."
Yet in April Courtney found himself in the uncomfortable position of voting against legislation that would have accomplished his goal: stopping the interest rate hike.
GOP leaders in the Republican-majority House put forth a bill to extend the 3.4 percent rate for another year, but paying for that extension by cutting from a preventive care fund that was part of the 2010 health care law. Democrats, including President Obama, were outraged by the suggestion.
The GOP bill passed on a 215-195 vote that was largely along party lines, with Courtney joining Connecticut's other four Democratic congressmen in voting no.
"It was just a truly cynical maneuver to allow them to say they supported keeping the rates low," U.S. Rep. Jim Himes, D-4th District, said of the Republicans' version.
"Their 'pay for' was so hyper-political that the president issued a veto threat before we even voted on it," Courtney said. "Saying that you're going to take [the cost] off screenings for diabetes, cancer, cardiac conditions, is really disgraceful."
The GOP bill was eventually voted down in the Senate, where Democrats have a majority. At the same time, the Senate Democrats' version of the bill, which would have raised Social Security and Medicare taxes on some high-earners to pay for the rate extension, couldn't attract the 60 votes needed to proceed.
In his presentation Monday, Courtney said that lightening the burden of student loans is an issue that strongly resonates with his college-age constituents at the University of Connecticut in Storrs. He credits UConn students with helping send him to Congress in 2006, when he edged out Republican incumbent Rob Simmons by just 83 votes.