WASHINGTON – DFL U.S. Reps. Collin Peterson and Tim Walz voted Friday for a Republican bill to keep federally-subsidized student loan interest rates low by taking money from part of President Obama’s health care law.
After a week of heated debate about whether to prevent a doubling of the interest rate to 6.8 percent and how to pay for the measure’s $6 billion cost, the Republican-led U.S. House approved the legislation by a narrow 215 – 195 margin. Peterson and Walz were the only two members of the delegation to vote against their party.
The bill extends the current 3.4 percent interest rates on Stafford loans for one more year. College students are eligible to borrow as much as $5,500 a year from the federal government for the program. The Republican bill pays for the bill by drawing on $6 billion from a preventative health care fund from the 2010 health care law, a non-starter for most Democrats.
Peterson has long had a reputation for bucking the Democrats and voted against the health care law when it passed in 2010. Walz has also broken ranks with Democrats on several major votes over the past few months.
The measure now heads to the Democratic-controlled Senate. Democrats there have proposed paying for the extension by ending a tax loophole for certain kinds of small business income.
Republican U.S. Rep. John Kline, who chairs the House Education Committee, said the legislation was “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.”
Walz issued a statement after the vote:
“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. 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.”