(From the Claire McCaskill campaign)
Unless Congress is able to achieve a compromise before July 1, interest rates on all new student loans will double from 3.4 percent to 6.8 percent, putting college affordability out of reach for many students and middle class families. In the Missouri Senate primary, Sarah Steelman, John Brunner and Todd Akin have previously endorsed proposals that would put big banks in charge of student loans, effectively allowing them to decide who gets to go to college and who doesn’t.
“Rather than putting forward solutions to help make college affordable for Missouri’s middle class families, Akin, Brunner and Steelman are more interested in allowing big banks to decide who gets to go to college and who doesn’t,” said Erik Dorey, McCaskill for Missouri spokesman. “Missourians expect their Senator to seek compromise and find solutions that create opportunities for middle class families, but Akin, Brunner and Steelman have all shown they would be a rubberstamp for the special interest agenda in Washington.”
If Congress does not act by July 1, loan interest rates that are currently capped at 3.4 percent would double, affecting nearly 7.5 million students and families.
Steelman, a self-described economist by training, wrongly claimed that a significantly higher interest rate for student loans would not limit the number of students who can afford access to education because students don’t pay attention to their personal finances. [Lars Larson Show, 5/10/12]
At a recent debate, all three Senate candidates said they support efforts to privatize student loans, which would eliminate federal support for Stafford loans and Pell Grants, saying that for-profit banks are best-suited to decide who gets financial aid for college:
Akin compared student loans to Stage III cancer: "America has got the equivalent of the Stage III cancer of socialism because the federal government is tampering in all kinds of stuff it has no business tampering in. So, first to answer your question precisely. What the democrats did to get rid of the private student loans and take it all over by the government was wrong. It was a lousy bill. That's why I voted no. The government needs to get its nose out of the education business."
Steelman said she'd "have to look at the proposal," then advocated for privatizing student loans: "I think we need more competition in the student loan area. Yeah. Before that it went through banks but those loans were guaranteed by the federal government. Again, just like as an economist you need competition and competition produces different pressure on those loan rates to be lower."
Brunner failed to say how he would vote on efforts in Congress to keep student loan rates affordable, but like Akin and Steelman, advocated for the privatization of student loans: "In the same way, when you get the banks involved and free enterprise involved and other opportunities involved and other businesses involved, the number one issue we're facing here in Missouri is finding enough educated people to be able to handle some of these new high tech jobs that are coming in to Missouri. So, the problem we have on these school loans is very difficult.We need to take a fresh look on this whole approach in order that the kids getting out of college don't end up with such a debt load that they're working another 10, 15, or 20 years dealing with the debt."