Sen. Sherrod Brown, D-Ohio, is pushing legislation that would prevent interest rates on Stafford Loans to millions of college students from doubling on July 1.
Brown came to the University of Cincinnati Thursday morning to meet with students who are benefiting from the Stafford Loans; and urged all students to contact their senators and urge them to pass a bill he co-sponsored which would keep the interest at its current 3.4 percent.
"Students in this country owe more than $870 billion in student loans - more than is owed to the credit card companies or in auto loans," Brown said. "It makes no sense to do this to our young people trying to get an education."
A 2007 law which set the rate for federal Stafford Loans to college students will expire June 30. Interest will go back to the old rate of 6.8 percent on July 1 if Congress does not act by then.
The difference between congressional Republicans and Democrats on this issue seems not to be over whether or not the rate should stay the same, but how that would be paid for.
Congressional Republicans want to pay for it through the money in in Affordable Care Act, the health care reform law passed by congressional Democrats in 2009.
The House has passed a bill with this funding mechanism. President Obama has said he will veto that bill if it reaches his desk.
Brown and other Democrats want it paid for by "S Corporations" - corporations that pay no federal income tax but have their income or losses divided among shareholders who report the income or losses on their own individual tax returns.
Most of these are small businesses. Brown would require those corporations to pay the payroll tax which fund Social Security and Medicare.
Brown said about 382,000 Ohio college students - including 22,000 at UC alone - would be impacted by a doubling of the interest rate on Stafford Loans.
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