PolitiFact Schools Lindsey Graham on Student Loan Reform
Graham claimed that a (nonexistent) "surcharge" would cost borrowers nearly $2,000.
Last week, South Carolina Sen. Lindsey Graham appeared on Greta Van Susteren's On the Record to lambaste student loan reform as a measure that will force students to pay more for their college loans in the long run. But PolitiFact's Truth-O-Meter has deemed the Republican senator's claim totally false.
The legislation signed into law yesterday eliminates subsidies to private lenders in lieu of a federal lending program that requires participation from colleges and borrowers. The law stands to save taxpayers $61 billion over a decade, with a majority of that money going toward an expansion of the federal Pell Grant program for low-income students. But Graham told Van Susteren that average students would spend "$1,700 to $1,800 more during the life of their loan" because of a mysterious student loan "surcharge" inserted into the law.
At the heart of the surcharge issue, he also claimed, is an interest rate problem—and because of the health care bill that student loan reform was tied to, the government will now make a greater profit on student loan interest than it did before. Got that?
PolitiFact didn't. So they looked into it:
We called and e-mailed Graham's office repeatedly for sourcing on his claim, but our inquiries were unanswered. Apparently Graham's numbers come from an amendment offered by Tennessee Republican Lamar Alexander during the Senate's debate over a package of fixes. His amendment would have forced the chamber to send the bill back to committee and amend it to reduce interest rates on student loans by 1.5 percent, from 6.8 percent to 5.3 percent. That interest rate reduction would have saved students in Tennessee upwards of $1,700 to $1,800 in interest over 10 years, according to Alexander.