Peterson, Walz break party line, vote for Republican student loan bill

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  • April 27, 2012 - 5:33 PM

Democratic U.S. Reps. Collin Peterson and Tim Walz voted Friday for a Republican bill that would take money from President Obama's health care reform law in order to keep the rates on federally subsidized student loans from doubling this summer.

The bill -- the Interest Rate Reduction Act -- would keep the rates for federal Stafford loans at 3.4 percent until next summer. If Congress doesn't take action, the rates will double to 6.8 percent come July 1.

Peterson and Walz were among 13 Democrats who supported the bill, which passed the Republican-led U.S. House by 20 votes, 215 to 195. 

The Republican bill would take roughly $6 billion from the Prevention and Public Health Fund of President Obama's Affordable Care Act, a frequent target of Republicans on Capitol Hill. The White House has already threatened to veto the bill.

"As a teacher and a parent, I know how critical a high-quality education is to our country's economic future, and I also know how much anxiety middle class families feel about the rising cost of tuition. The path to the American Dream runs through a college education. Piling even more debt onto the backs of our students is unacceptable," Walz said in a statement.

"While I strongly disagree with how this bill is paid for, I will not let politics get in the way of keeping college affordable. This bill will get us to the next step towards solving the problem to ensure students and middle class families won't see their interest rates double on July 1."

Peterson's office did not issue a statement over his vote, but the self-described conservative Democrat has often voted for Republican-backed legislation. The rest of Minnesota's representatives voted along party lines on the bill.

The issue picked up steam this week when President Obama visited colleges in three swing states this week to discuss college affordability and his efforts to keep the rates on Stafford loans at 3.4 percent. Likely Republican presidential Mitt Romney agreed the rates should be capped and Congressional Republicans soon followed suit.

The dissent has come over how to pay for the one-year extension.

With Friday's passage in the House, the bill now heads to the Democrat-controlled U.S. Senate,  where leaders want to cover the extension's $6 billion price tag by closing tax loopholes for some small businesses. That isn't likely to mesh well with the House Republican bill.

Republican U.S. Rep. John Kline, the chair of  the House Education and the Workforce Committee has called the Prevention and Public Health Fund a "slush fund" that allows bureaucrats to use the money as they please.

In a statement, released today, he said: "The Interest Rate Reduction Act is not a perfect solution. But it will allow us an opportunity to continue working toward a long term solution on student loan interest rates, one based on the free market instead of the whims of politicians in an election year."


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