Sanders: It’s a ‘dumb idea’ to profit off student loans

Sanders’ comment came hours before the Senate is expected to vote on a bipartisan deal addressing student loan rates.

{mosads}The House passed legislation well before what was seen by some as a July 1 deadline, after which the interest rate on federally backed loans rose to 6.8 percent. But the Senate opposed that House bill and needed more time to work out a compromise.

The Senate deal would base the loan rate on the 10-year Treasury note plus 2.05 percent and set an 8.25 percent cap on loan rates for most students.

The House-passed bill put the rate at the 10-year note plus 2.5 percent, and has an 8.5 percent cap on consolidated loan rates. But the House version proposed a variable rate for loans, while the Senate bill would set fixed rates.

Democratic opponents of the bill argued that it “profits off the backs of students.”

The bipartisan deal maintains that the government profits $184 billion over 10 years from the student loan program — the same as if the 6.8 percent rate were in place.

Sanders said he didn’t know why the Democratic-controlled Senate is passing essentially a “Republican bill.” He added that if the Senate deal isn’t amended it would be a “disaster” for students.

“The truth of the matter is that is the bill on the floor if passed without amendment it would be a disaster for the young people of our country looking forward to going to college and to the parents helping them with their bills,” Sanders said. “Our goal must be that the youth of this country are able to get decent jobs or if these choose to go to college to be able to afford to go to college.”

Sanders will get a vote on his amendment to sunset the bill after two years, but it will be held to a 60-vote threshold.