Smarter Solutions for Students Act

Floor Speech

Date: May 23, 2013
Location: Washington, DC

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Mr. MESSER. I would like to thank Chairman Kline for his hard work on this bill. I'd also like to thank Subcommittee Chairwoman Foxx for her hard work.

I rise today in support of H.R. 1911, the Smarter Solutions for Students Act.

This debate is about a fundamental question: Who do you trust more--the promises of Big Government or the private market setting rates in the marketplace?

I believe we must return to a market-based policy rather than keeping Congress in the business of fixing interest rates by throwing darts at a dart board.

Let me make two simple points to this Chamber. First, markets work. The President has recognized this, Education Secretary Duncan has recognized this. They both have called for a return to market-based rates and policies on our student loan interest. Families deserve the security of knowing that the marketplace will be setting their interest rate, not the results of the next mud wrestling match in Congress.

We've heard a lot of rhetoric on the other side of the aisle about how rates will rise if we change this policy. Lost in that rhetoric is the fact that over the course of the last decade there have been times where interest rates would have been much lower had we had a market-based approach to interest rates.

In 2002, student groups lobbied Congress to set student loan interest rates at a fixed 6.8 percent, beginning in the 2006 academic year. At that time, rates on student loans were variable and at historically low levels. However, student groups believed that a 6.8 rate would result in a better deal. It turned out they were wrong. Through that period, interest rates--had we stayed at a variable rate--would have been 2.36 percent. I don't think it's fair to those families that accumulated loans during those times that we had the government in the way.

The second point I think that needs to be made in this debate is that while we need to have low interest rates for students--and we're all concerned and want to make sure they don't rise--the real threat to young people in this country is not a few dollars on their interest loans.

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Mr. MESSER. The real threat is the explosive growth of debt in this country, the fact that we are adding $1 trillion of debt each year, $6,800 of debt per taxpayer each year. It's dragging down our economy and hurting our ability to create jobs.

Let's return to commonsense policy on interest rates. I urge my colleagues to support H.R. 1911.

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