Skirmishes over student loan rate offer fall preview

  • Article by: COREY MITCHELL , Star Tribune
  • Updated: May 4, 2012 - 12:33 AM

Rep. Kline tapped an issue that is echoing through Minnesota.

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John Kline

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WASHINGTON - As chairman of the House Education and the Workforce Committee, Rep. John Kline, R-Minn., has challenged President Obama's policies at every turn, on issues from the No Child Left Behind Act to labor laws.

But it's his stance on interest rates on Stafford Loans for college students, which will double to 6.8 percent on July 1 if Congress doesn't act, that has sparked a national debate that's reverberating through Minnesota weeks later.

An issue that lingered for months with little attention, the student loan debate has now become a proxy war for the November elections: pitting student loans against other priorities such as oil companies, small business or the president's health care law.

While sparring over how to pay for the $6 billion cost, Republicans and Democrats have made it clear that they want the current student loan rates to continue.

But along the way, each party is offering up sacrifices in an effort to frame the debate as a choice between college students and others deemed less worthy. For example, the House passed a Republican bill that would take money from the Affordable Care Act -- so-called Obamacare -- to keep the loan rates where they are. Democrats have proposed different ideas, such as paring tax breaks for oil companies.

With data suggesting that Minnesota students who borrow to pay for college finish an average $29,000 in debt, and with more than 200,000 students who could be affected by the Stafford rate increase, the issue has become a hot one in the state's classrooms and campaigns.

Challengers in the fall congressional races have already knocked incumbents of both parties for their votes on the Republican bill that was approved last week.

Bringing the issue home

During the weeklong congressional recess, several members of Minnesota's delegation have brought the issue home, hosting forums and pushing legislation in hopes of connecting with young voters and middle-class families.

"They want to hear from the people right in the mix" who are struggling, said Julie Selander, interim director of One Stop Student Services at the University of Minnesota.

During a stop at the State Capitol on Monday, Democratic Sen. Al Franken previewed plans to introduce legislation to create a universal financial aid form to allow families to better understand the cost of college. Sen. Amy Klobuchar and Rep. Betty McCollum, both Democrats, also hosted student forums to discuss federal financial aid concerns.

"There's clearly consensus that doubling the rate ... would be damaging for students who are barely hanging on," Klobuchar said after attending a forum Wednesday at the University of Minnesota.

Kline has stayed out of the student loan spotlight at home after last month denouncing Democratic efforts to halt the rate increase as fiscally irresponsible. "I have serious concerns about any proposal that simply kicks the can down the road and creates more uncertainty in the long run," he said in a statement at that time.

Last week, Kline was among U.S. House members who passed the Republican-backed bill that would take money from Obama's Affordable Care Act to keep the rates at 3.4 percent.

6-2 for GOP bill

Most Democrats opposed the bill, and the White House has threatened a veto, but Minnesota's U.S. House delegation supported the measure 6-2, with Democrats Collin Peterson and Tim Walz joining the state's four Republicans in backing it. McCollum and Rep. Keith Ellison cast the no votes.

"The American people should never have to choose between their health and their education," Ellison said .

Kline also said he's worked for months on a plan that would tie interest rates on federal student loans to market rates, but a leading Democrat on the House Education and the Workforce Committee said he has yet to see evidence of that. Rep. George Miller of California said Kline ignored a letter he wrote in February that urged cooperation to keep the Stafford Loan rate from doubling.

"Instead, in March, House Republicans passed a budget that would see interest rates double for students," read a letter written this week by Miller and a fellow Democrat.

Kline's staff declined to make him available for an interview for this story.

Kline "took their concerns into consideration as he and his Republican colleagues explored possible solutions to the Democrats' scheduled Stafford Loan rate increase," said Alexandra Sollberger, communications director for the House education committee.

In Miller's letter to Kline, he wrote that Congress should change the law before the end of May to ensure families and students have accurate information and know their options. Despite passage of the Republican bill last week, he wrote, "we are far from having stopped the interest rate hike."

Corey Mitchell is a correspondent in the Star Tribune Washington Bureau. Twitter: @StribMitchell

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