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Student Loan Refinancing Bill Dies In U.S. Senate

by Hugh McQuaid | Jun 11, 2014 12:38pm
(4) Comments | Commenting has expired
Posted to: Congress, Economics, Education

Hugh McQuaid file photo

U.S. Sens. Richard Blumenthal and Chris Murphy

Legislation pushed by Connecticut’s U.S. senators to allow former college students to refinance their loans failed Wednesday to clear the 60-vote threshold needed to pass the Senate.

The bill would have allowed people paying high interest rates on existing student loans to refinance their debt at current student loan rates, which were lowered by legislation passed last year. It relied upon the elimination of tax breaks for some upper income households in order to fill the revenue hole that would be created by lower-than-expected returns.

The bill failed on a 56-38 vote Wednesday morning.

U.S. Sen. Chris Murphy, who cited his own lingering college debt while trying to shore up support for the bill, blamed Republicans in Congress for obstructing the legislation.

“Allowing students to refinance their loans will make college more affordable for millions of people, plain and simple. But despite that, Republicans have yet again blocked another piece of legislation that would help strengthen the middle class, level the playing field, and shrink the income gap that continues to persist in this country,” Murphy said in a press release.

U.S. Sen. Richard Blumenthal called the vote a setback for students and their families. He said he intended to eventually bring the bill back.

“Once again, the misuse of arcane Senate rules has done a disservice to the American people, most especially current, former, and prospective students who are trying to better themselves,” Blumenthal said in a press release.

During a press conference recorded Tuesday by the newspaper Roll Call, Senate Republicans characterized the bill as doomed in the Republican-controlled House. Republicans said they would prefer to focus on passing legislation to address problems in the Veterans Affairs health care system.

“The issue in the senate this week is what are our priorities?” Minority Leader Mitch McConnell said. “We’re going to have another showboat in the morning on a tax increase bill styled as a student loan bill.”

McConnell said the proposal to eliminate upper income tax breaks—often referred to as the “Buffett Rule”—is a political gimmick.

“My counsel to my members is: why would we want to get on a bill like that that clearly is not going anywhere, it will be blue-slipped by the House, when we have a bipartisan veterans bill,” he said.

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(4) Comments

posted by: Noteworthy | June 11, 2014  2:16pm

Tell the Truth Notes:

1. The federal government makes billions - tens of billions of dollars in profit on student loans. Democrats and Republicans both signed on to this years ago. The practice should be ended and frankly, never should have been allowed.

2. The “pay for” part of this bill was a minimum 30% tax on those making more than a million dollars in adjusted gross income. This new tax requirement would have more than paid for this refinancing but there is no getting around it as a new tax.

3. As such, Democrats like Murphy and Blumenthal both knew this was going nowhere but it does provide fodder for their endless parade of “outrage days.”

4. Instead of carping on the GOP - put forward a straight bill that eliminates the profits from student loans - and bars universities and for profit colleges from raising tuition and fees by more than the cost of living. While the revenue will drop to the government, it was always ill gotten gains. Find it elsewhere by eliminating the glutinous tax code with all its arcane give-me(s) that favor Hedge Funds, banks, business and the wealthy.

5. Blumenthal and Murphy should get behind real tax reform and the “arcane” rules they keep endorsing directly or by doing nothing.

posted by: justsayin | June 11, 2014  2:25pm

This shows yet again how little influence, read none, these two have. CT is doomed with these two as our representation.

posted by: Joebigjoe | June 12, 2014  5:43am

How about an emergency bill instead to lock down our borders. Maybe MSNBC doesnt cover this but I have to think that even the people I usually disagree with on this site have to be looking at the few hundred thousand kids coming across the border right now in numbers never seen before, mostly from Central America, and many alone, is not good for this country. Apparently Central American newspapers have been announcing that President Obama has invited people to come to America and they have to hurry. I’m not saying he did, but when he isnt pushing to close that border now, and “HIS Government” which are words he used last week are taking these kids and shipping them to other states, like Massachusetts, and building temporary facilities for them, you have to ask what this man is doing.

Now back to all that all important issue of refi student loans.

posted by: dano860 | June 12, 2014  6:54am

A swipe of a pen from the President just the other day gave student financing a kick in the tail. Payback 10% of their earnings and completely absolved after ten years! That is pretty lax in terms of any loan.
Noteworthy is correct and I’ll add one more item. Every time the government steps in to adjust or change the program the colleges see it as their opportunity to hike up tuition.
Cut out the whole program, these schools are profit centers operating off the backs of the tax payers.