GOP Education Leaders Celebrate Lower Student Loan Interest Rate

Lowest Interest Rate in History Takes Effect July 1^st as Republicans Deliver  
on Pledge to Improve Access to Higher Ed

            WASHINGTON, D.C. - House Education and the Workforce Committee Chairman John Boehner (R-OH) and 21st Century Competitiveness Subcommittee Chairman Howard P. "Buck" McKeon (R-CA) today hailed a scheduled July 1st reduction in the student loan interest rate as the latest accomplishment by the Republican Congress in improving access to higher education.

            "On July 1st, the student loan interest rate will fall to its lowest level in history, making college more affordable for students across the nation," Boehner said. "I commend Chairman McKeon for his work in securing this improved rate. It’s great news for the more than five million students and parents in America today who need student loans to help pay for college."

            McKeon, who negotiated the rate cut formula as part of the 1998 Higher Education Act reauthorization, said the lower interest rate scheduled to go into effect July 1 -- 5.99 percent -- is proof that Republicans in Congress are serious about increasing access to higher education.

            "I remember that the 1998 negotiations were not easy," McKeon said. "But we were able to get a rate that preserved the market-based lending program while making college more affordable."

            "It's just an incredible rate, and they just don't get this low,'' Leilani Gamboa-Marquez, associate director of financial aid at Chapman University in Orange, California, told The Orange County Register ("Record lows for student-loan interest rates," Diana McCabe, June 20, 2001).

            Boehner and McKeon said the new lower rate is one of a series of steps taken by the GOP Congress to increase access and decrease the costs of a college education.

            The two lawmakers pointed also to education provisions in the Economic Growth and Tax Reconciliation Act of 2001, President Bush's $1.35 trillion tax relief bill, which was signed into law June 9. These provisions:

            -- Expand qualified tuition programs;

            -- Exclude employer-paid tuition from a student's taxable income;

            -- Eliminate the 60-month limitation on student loan interest deductions to allow for deductions during the life span of the loan;

            -- Eliminate taxation on select scholarship awards;

            -- Provide taxpayers a deduction for qualified education expenses paid by the taxpayer during a tax year;

            McKeon and Boehner also touted FED.UP, a program launched by McKeon which identifies needless or overly burdensome regulations on federal student financial aid. A page on the Education and the Workforce Committee's website solicits input on current regulations. In addition, the committee is reaching out to teachers, students and administrators at institutions of higher education to gather information on burdensome regulations.

            "Excessive regulations impose needless barriers -- and unwarranted costs -- on students and parents," McKeon said. "Republicans in Congress have launched a search-and-destroy mission aimed at burdensome regulations.”

            Boehner also stressed the importance of the Internet Equity and Education Act introduced by Rep. Johnny Isakson (R-GA), which will ease federal restrictions on Internet learning. The legislation will allow institutions to embrace “anytime, anywhere, and any pace” learning.

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