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Miami lawmakers OK bill on student loans

Location: Washington, DC

Miami lawmakers OK bill on student loans

Lawmakers from Miami-Dade County voted with a large majority of their colleagues in the U.S. House of Representatives Wednesday to cut interest rates on need-based student loans.

The legislation would slice rates on the subsidized loans from 6.8 percent to 3.4 percent in stages over five years at a cost to taxpayers of $6 billion. About 5.5 million students get the loans each year. The vote: 356-71.

None of the four lawmakers who represent Miami-Dade County voted against the measure. Voting yes: Republican Rep.s Lincoln Diaz-Balart, Mario Diaz-Balart and Ileana Ros-Lehtinen, along with the area's lone Democrat, Rep. Kendrick Meek.

'We must do all we can to assure that the federal interest rates on student loans are cut and help our students save their hard-earned money. This bill is a step in that direction,' Ros-Lehtinen said in a statement.

'Students want to learn and grow in their communities, but the high cost of education is a hindrance on their good intentions,' she said.

'A college education means a chance to achieve the American dream of a good-paying job and home ownership for millions of young people,' Meek said. ``It should lead to personal success, not financial distress.'

If approved by the Senate and signed by President Bush, the bill could benefit tens of thousands of local college students in Miami-Dade, Meek said. He said, for example, that 70 percent of Florida Memorial University students receive subsidized student loans that cover an average of just half of their tuition costs.

Though clearly popular, the legislation sparked a debate over where to set the nation's education priorities -- helping college graduates pay off their debts or expanding federal grants for low-income students.

Mario Diaz-Balart, in a prepared statment, said he supported the measure but was disappointed that more was not done to address the rising cost of higher education.

'This Congress chose to do nothing to help curb rising tuition costs or expand access to higher education for millions of low- and middleincome students,' he said. ``In the land of freedom and opportunity, every student should be able to afford a college education.'

Democrats conceded Congress needs to do more to make college more affordable. But they said reducing student loan rates was a significant step toward tuition relief.

The Bush administration opposes the bill, and Senate Democrats plan to bring up a more comprehensive bill that could complicate its prospects for becoming law.

The House bill aims to reduce the $6 billion cost by reducing the government's guaranteed return to lenders that make student loans, cutting back the amount the government pays for defaulted loans and requiring banks to pay more in fees.

Lending institutions opposed the bill.

'A strategy of raiding a financial aid program to fund modest proposals is inadequate to the challenge,' said Kevin Bruns, executive director of the America's Student Loan Providers, a group that represents leading lenders.

While the legislation matched the Democrats' pledge to pass the student loan measure in the first 100 hours of legislative action by the new Congress, it fell short of their broader goal of lowering interest rates for parents who take out college loans for their children.

During the 2006 congressional campaigns, Democrats also said they wanted to increase the maximum Pell Grant award from $4,050 to $5,100. Pell grants go only to the neediest students and do not have to be paid back.

'We want to increase the Pell Grant,' said Rep. George Miller, D-Calif., chairman of the Education and Labor Committee. ``We hope to be able to enlarge the tax deductions for parents paying for tuition and the cost of college beyond that.'

'So, yes, in this 100 hours, this is what we can do,' he added. ``This is what's affordable.'

Republicans argued that Democrats had chosen a politically expedient way to make good on a campaign promise instead of finding ways to increase federal college grants to help the poor meet rising college tuition.

'It is a whoop-de-doo bill,' said Rep. Rob Bishop, R-Utah. ``But to be honest, what it does for my kids in college is nothing. What it does for the friends of my kids in college is nothing. What it does for the students I taught in high school and are still in college is basically nothing when it could have done so much more.'

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