Alert reader Marc Scheer sent me a quote from the Christian Science Monitor story that indicates confusion over the financing of the House's proposed interest rate cuts on student loans.
The bill is here if you want to read it. As far as I can tell it doesn't indicate what will happen after 2012 when the rate finally goes down to 3.4%.
Taxpayers aren't paying for it. As the bill reads, the estimated $6 billion cost of cutting loan interest rates from 6.8% to 3.4% will be taken out of government payoffs to student loan companies--Lord knows they can afford it.
The CS Monitor points out that Ted Kennedy, in the Senate, has a much more useful, comprehensive, and costly student aid package, increasing the Pell Grant to $5100 and encouraging schools to switch to the direct loan program. Remember guys, if we eliminated all government payments to student loan companies by switching to the more efficient direct loan program, that could save $60 billion over 10 years to dedicate to student aid.