Sen. Bob Corker on student loan ratesDuring a Times Free Press editorial board meeting U.S. Sen. Bob Corker, R-Tenn., spoke about the need to use market interest rates for student loans.
LOOK ELSEWHERE FOR VICE PRESIDENT
For those watching the GOP vice presidential search, U.S. Sen. Bob Corker wants folks to know one thing:
Don't expect the candidate to be from Tennessee, including himself.
Presumptive GOP presidential nominee Mitt Romney already has a business background, Corker said, and Tennessee already is presumed to be in the GOP win column.
The Volunteer State "is not going to be a swing state," Corker, a Republican seeking a second Senate term in November, told residents at a morning coffee gathering at the Cleveland/Bradley Chamber of Commerce.
He said he has not talked with Romney about a running mate but was clear about who the VP nominee would not be.
Corker fielded questions ranging from the Middle East, Egypt's election, the American economy and the European budget crisis to civility in Congress.
-- Compiled by staff writer Randall Higgins
HOW THEY VOTED
Sen. Saxby Chambliss (R-GA)
Sen. Johnny Isakson (R-GA)
Rep. Chuck Fleischmann (R-TN)
Rep. Scott DesJarlais (R-TN)
Sen. Bob Corker (R-TN)
Rep. Phil Gingrey (R-GA)
Rep. Tom Graves (R-GA)
Sen. Lamar Alexander (R-TN)
Source: U.S. Senate and House of Representatives
ABOUT THE LAW
In 2007, Congress passed the College Cost Reduction and Access Act, which, among other things, gradually reduced the interest rate for subsidized student loans. This year the rate was 3.4 percent. The law was set to expire June 30, which would have meant interest rates would have doubled. Congress voted last week to maintain interest rates at their current level.
A key Congressional vote at the last hour to keep interest rates on student loans from doubling was nothing more than political maneuvering, Tennessee's junior senator said Monday.
"What has happened is that President [Barack] Obama made it a campaign issue and Mitt Romney [the Republican presidential nominee] quickly agreed," U.S. Sen. Bob Corker, R-Tenn., said during an editorial board meeting at the Chattanooga Times Free Press on Monday.
Pressure on lawmakers to act on student loans mounted last week. Interest rates on subsidized Stafford loans, awarded based on financial need, were to
jump from 3.4 percent to 6.8 percent on July 1 if Congress didn't act. About 7 million students would have been affected. Friday's vote is expected to save those students about $1,000 over the life of their loans.
From the beginning, members of both parties agreed something had to be done to keep interest rates lower for students who borrowed after July 1. The
sticking point was how to pay for it. Lawmakers in the end included an extension of the current interest rate in a transportation reauthorization conference report. The Senate vote was 74-19 and the House vote was 373-52.
The estimated $6 billion it will cost to maintain current interest rates will come from changes to pension policies and from limits on how long students can get the loans.
While student advocates and school officials say the lower rates are needed, they also say Congress needs to come up with a long-term solution to the rising cost of higher education.
"Fifteen years ago across the United States and in Tennessee, the state paid for more than two-thirds of the cost of going to school for a year, now is down to less than one-third," said James Catanzaro, president at Chattanooga State Community College where this year close to 5,000 students had need-based loans totaling $14 million.
Last week's vote is a "step in the right direction and a huge victory for students," said Mamie Lynch, research and policy analyst for The Education Trust. "But it's kicking the can down the road to next year when Congress is going to have to revisit the issue."
Since Congress has been handling several issues, including higher education, in one or two-year bites, Rich Williams, higher education advocate for U.S.
Public Interest Research Group in Washington, D.C., said his organization is excited to have one more year.
"We are not discouraged, it provides us another year of opportunity to really have a full dialogue about what the appropriate level of interest rates should be," he said.
Corker said one solution mentioned before is to tie interest rates to those in the market instead "of Congress just coming up with a number."
Roger Brown, chancellor at the University of Tennessee, agrees.
"While I favor the lower rate, we can't permanently hold them so far below the market," he said. "We need a more sophisticated mechanism for setting these rates and we cannot leave out the value of having more people educated out of that equation."
Despite increases in grant and scholarship aid, a record $1 trillion in student loan debt was reached earlier this year. The average debt for a Tennessee university graduate, both in public and private schools, is about $20,000.
Alek Vey, spokesman for Rep. Chuck Fleishchmann, who voted for the measure, said the "transportation bill cut over 70 federal programs while ensuring that Tennessee receives critically needed funding to maintain and improve our transportation infrastructure. The bill contains no earmarks, reduces red tape and is fully paid for."
Corker said only in Washington "can you spend money in one year, pay for it over 10 and say that is paid for."
Washington is partly to blame for the rising cost of college, he said.
"We in Washington have driven the cost of higher education through the roof by putting all of these Medicaid mandates in place," said Corker.
In the last 20 years, Tennessee appropriations to higher education have increased 74 percent to $1.4 billion. During the same period of time, appropriations to TennCare increased 193 percent to $2.8 billion -- but that also includes a hospital assessment fee, which makes up a large portion of the increase in the last two years, according to Republican Gov. Bill Haslam's office.
Some argue the impact of keeping the interest rates low is minimal.
"It doesn't change your upfront cost," said Russ Deaton with the Tennessee Higher Education Commission. "I don't think this is going to be the make or break issue for anyone to go to school," he added.
The governor recently announced plans to meet with business and education leaders to discuss higher education in the state, from accessibility to cost and relevance to today's workforce.
Perla Trevizo joined the Chattanooga Times Free Press in 2007 and covers immigration/diversity issues and higher education. She holds a master’s degree in newswire journalism from Universidad Rey Juan Carlos in Madrid, Spain, and a bachelor’s degree in political science from the University of Texas. In 2011 she participated in the Bringing Home the World international reporting fellowship program sponsored by the International Center for Journalists, producing a series on Guatemalan immigrants for which she ...