see you tomorrow. >> today on c-span, joe courtney is our guest on generalers" followed by keith alexander testifying on the data collection programs. later, a hearing on security clearances were federal employees and contractors. >> we want to welcome to "newsmakers" congressman joe courtney, a democrat from

connecticut. the lead voice for student loan rates. july 1re slated to go up unless congress acts. we had to reporters in studios with us. philip elliott with the associative press and peter schrader with the help. hill. >> a year ago we were talking about keeping the interest rate set by congress. now there looks like a proposal from the president to hit the ten-year treasury note. you want to extend the interest ands and keep them well -- keep them low. how much of this current blame falls onto the

president for throwing out the idea? the issue of the stafford loan program future .oes determine a long-term fix i give him high marks that they try to come out with a proposal that does not have a lurching one year to the next. it started last year with the one-year extension and now we are 10 days away from the rate doubling again. it is not for all students who use the stafford program. it is for the lower income students and family. the president's proposal would try to take advantage of cheap money rates that exist right now. on somehave some merits portion of it. to bean issue that needs handled with care. part of the problem we are dealing with is that it was

created back in 2002 with the budget reconciliation act that passed that year that fake student loan interest rates for stafford at 6.8%, commencing in 2005. that is what we are struggling with to this day. his proposal does try to get us out of this box that we're in right now. good starting point. it is not a finished project. to that extent, i do think the smarter move is to protect the toer rate and give us time fix some of the issues and problems i think exist in his plan and to pass the higher reauthorization act that deals with a broader range of affordability which we are already about a year overdue in terms of enact in. >> we have known this is coming for a year. last year we agreed to keep the rate at 3.4% for one more year.

now they are set to go 6.8 and that is out of pocket. we have known this is coming. why has this not been a higher issue both for the president and for senate democrats? failed tothey both get across the 60 vote threshold. only the house republican plan is the only one that has gotten the boat and is ready for some sort of committee. is the of the problem that messed crisis up the oxygen in the wake of the election. it derailed this issue sooner. the budget was delayed as well. not a proposal from the executive branch until later than normal. that is one explanation. it is not an excuse.

point is we should not go backward for college too dense. the house republican measure , now did pass on the 23rd that the ceo has had a chance , outside the numbers agency groups have analyzed it. a both confirmed that that would be worse than doing nothing and letting the rate double. at least this has cleared. we can't at least engage in a process. what i will tell you is that there is no question there are discussions going on in the senate right now. whether it bears fruit within the next 10 days will be a nailbiter. it is unfortunate that families and students are left up in the air when they are making life decisions this summer. i have a doctor starting next fall. she does not use the program. the start of the school year is

fast approaching. we talked to the chairman of your committee. he said this will not get results unless the president steps in and takes control of this issue. the president is leaving on a chair next week to africa. are you concerned he is not playing a bigger role? >> there is no question the white house was engaged in its. he was not personally in the room at the negotiations. they are definitely aware of the latest state of play. i communicate with the white house on a regular basis about todischarge petition effort freeze the rate for another two years and give us some breathing room. they are in gauge. question -- engaged. i have no question in my mind that they are deeply aware of what is going on in the senate.

i think everyone understands if you look at the history of negotiate a compromise the executive branch has to part of >> i wouldssions like to follow up on that idea. the president took a prominent role in the heat of the campaign last year. last year he went on a mini tour talking to this issue and manage to get mitt romney to come on board with the idea. how difficult is it at this point or we are days away and we do not have a compromise in place. how much more difficult has it whento advance this issue you do not have the spotlight of a campaign that can drive on the issue? >> you are right. ofre is not the barnstorming college campuses happening right now. anybody in this business understands the power of this

issue. there was a poll just released a couple of days ago where 84% of the public is opposed to letting the rate double or go up from rates that are far above what regular consumer rates are for home mortgages and car loans. that they did not go with the bill ma shows this is an issue they need to handle with care. it cuts across every state, blue they are struggling with college class. does not have the same dynamic, the political power of this issue is still very dangerous for either side to be on the wrong side of. that is why i do think there will be a lot of external force that will be brought to bear over the next few days to avoid either party being to blame for

allowing this to happen. >> are you concerned at all that democrats get the blame? republicans have acted to prevent this from happening. it did happen on the senate side. >> any action does not necessarily mean it is the right action. this has been looked at by credible analysis. it worsens the problem. they may think that they have bought themselves some immunity or safety by caching that but it is not clear the smell test for people in families when they look at the fact it is a true variable.

it ends up with a higher interest rate. i think they have reasons to be washing theirt hands of the issue after having passed that measure. as i have mentioned earlier, discussions are bipartisan. they have gotten themselves politically distance or cleansed from passing that measure. more aslan will cost the years go on. -- 16 monthsns away from the midterms. some of the students could have had a great deal of the president would sign into the house republicans plan right now. in the short term interest rates would go down very quickly. they will rise over the coming years but i see you shaking your head.

>> it is a true variable. the initial rate on paper may look like it is lower but if someone is used to real estate closings, variable rate mortgages reset every year. while the student is a college willinitial sucker rate rise during the time that they are in college. it is an illusion for people to think that somehow is relief. they are going to end up at that most with a rate analysts project will be worse than doing nothing. even with bernanke's announcement that monetary policy is starting to ease, you are seeing markets change. this notion that trying to jump ratee low treasury yields today is somehow a solution to this problem, for people who

have any kind of longview they understand that does not cut it. onhe made these comments wednesday. we're sitting down and and talking on this thursday. talking 10 year policy. i talking short-term politics. am imagining the attack ads that can be done on this. you know title actions. what was it 84 votes? is this an issue that could be used effectively in the midterms? is it something that you and i are talking about now but 16 months from now when voters go to the polls is is going to be one of those issues that just really does not matter and folk psych it up and deal with interest rates? >> it is 83 votes.

it is a good question. i deeply believe this has tremendous political power. for an attack ad to have credibility, there has to be at least some level of credibility to it in terms of the argument that is being made. frankly, it is artie started with the nrc see -- it has already started with the nrcc. say i'm not picking up a lot of concerns for my colleagues on the democratic side. there is no validation from any of the groups that advocate for higher education affordability in terms of college campuses, the foundations that follow this issue. throughly, having been the ring of fire in one of these close races, to me that is an

attack message that will fall short. >> on the house republican bill you said because it is a variable rate that rate on student loans will continue to climb until they can theoretically get below that 6.8% that we are currently talking about. in the immediate short term, the rate remained relatively low. we are talking about low rates across the board. you said there may be changes down the way as the economy strengthens and we get out of what has been years. at the same time, if you adopt the house republican now you get the low rates now. does that offer an opportunity to renegotiate this as sure -- issue going forward? is it better to do nothing and let them jump to 6.8%? >> the better thing is to find competing messengers and come up with some stability.

it is a good question. it focuses on the difference between the white house plan and the house republican plan in terms of what is a variable rate. the republican plan is a variable rate that reset from one year to the next for the same loan of the student takes out in year one. president obama's variable rate is different. when you take out that loan in , that is-- in year one the loan for the full 10 year term. it does not reset in the sophomore or junior year of college. graduates atson the end of the fourth year, the rate in year one is the rate you will pay after you graduate. the problem with the president's hen i would observe is that

has no caps at all in terms of how high the rate can go over the temperature. that is the case for me budget neutral. seventh and eighth graders are going to be the one that pay for the benefit in the early years under the white house proposal. these are the issues we have to wrestle to come up with the that takeset spot care of lower money and making sure that the younger kids are not going to end up taking the brunt of the cost of adopting that proposal in the early years. really time to get some plan together or are we more realistically looking at another one-year or two-year extension? how much can really be done? that is the logic of my

proposal, to acknowledge the fact that this is a very tricky issue when you are dealing with variable rates. in my opinion to cautious approach would be to not go backward, to extend the lower and come up years with the appropriate adjustments to the stafford program and come with a whole list of issues we have not even come close to touching on, refinancing debt after kids leave college which is a huge problem in terms of consolidation. there are a lot of obstructions in the status quo, helping kids make better choices when they go to college. i believe it is the most beneficial way to avoid these core stories of kids graduating and poor debt prospects.

data the other day were graduation rates have hit a record level. back andve been going getting degrees. they have been retooling themselves to finding new forms of work. we are seeing an uptick in terms of young americans were going through and getting degrees which is what our economy means. that was part of the foundation report that came out the other day. these are big states for our countries future growth. consumingrd loan is the oxygen right now. it is so critical with 10 days to go. i think we can come up with some really good ways to help families deal with that. it has almost become a necessity. >> we have a little less than 10 minutes. i enjoyed our hearing yesterday on the reauthorization no child left behind.

i sat there the senate markup last week and the house hearing this week. thet seems to be focused on role of the education secretary and what arnie duncan and his people will have an authority. chambersns in both seem to want to undercut the secretary's authority to the point where he is basically little more than a cheerleader for state and local education officials. is this worth having to preserve some power? have some sympathy for the frustration that people have in terms of where we are right now. there has been a vacuum by not reauthorizing this for as long as i have been inc. congress.

we were supposed to do this in 07 and 08. it has allowed the office to fill that space and through the waiver process that has too much power. in terms of driving education policy around the country. think you did what he had to do in terms of making sure these mandates did not come in with massive penalties. having said that, that is not an acceptable state of affairs. to the extent they're pushing back and saying we should have a law that says the ground that is democratically debated and agreed to, i think it is a better balance than having the secretary's office so

soon all the authority. not getting be billed through has given the obama administration almost free rein in terms of driving an agenda which in some parts of the country is not really the best way to do it. think we should do a reauthorization. we should have policies set by congress and not abdicated to the secretary's office. >> i want to talk to about the little college. theent loan debt is at highest level of consumer debt out of there. because of of a college education tuition is outgrowing any thing. what sort of role does congress have to say and how much it college education should cost?

we talked about was student loan interest rate should be. do they have a role to play? you look at the size of the budget which is part of the budget that deals with higher tens ofn, it is billions of dollars. should not just be filling up a tire that has a leak in it. we should plug the leak in terms of where the money is going to higher and higher tuition costs. the reasons for those increases are not because we have tried to help with some of these programs. has been a retreat in terms of support for higher education.

they have fallen from where it was 10 years ago. toa result, this has gone up fill the hole. it has some effort that benefit from the the programs. the federal government finances through private and public universities. this is not the most popular agenda with colleges and out there.s that are

the fact of the matter is we do have to get to the underlying rate ofich is a increase that is far above inflation. >> session on that as well, is there any concern at all that it allows people to borrow more to go to college, is there the concerned that you are encouraging people to take on more debt to pursue an education? again, there's a big debate on this. commercial onhe whether or not student loan access drives it tuition. i am more of the school of not the driving force. however, there are definitely issues out there with some sectors within higher education.

sector he uses a disproportionate share of title to fund it tuition and has very mixed results and in some instances poor results where i do think that title iv is feeding some of the high cost of those institutions. credithim a lot of about the fact is trying to set some accountability and measurement for that tour to try to control as a distortion of increase in spending. another issues were our committee should be hard at work right now doing a higher reauthorization. it is to drill down the areas we know our real problems. we were talking about the

student loans. what i think is lost is that student loans are very lucrative for the government. the money that went out this year will actually bring back $51 billion more for the government then went out of the door. it is not apples to apples to fortune 500 companies. the budget request this year had a negative request for the education department because they bring in so much money. he talked about the higher where does this fit into the conversation? is this a $51 billion profit appropriate for a student that is supposed to need federal help get to college? >> i have to ask for a with response. .et you are absolutely right most members of congress have no idea that is a windfall for the treasury. i would argue that stafford was

designed way back to really provide an avenue for young people to go to college for public interest and not to create a cash windfall for the treasury. a deeper policy which the reauthorization act needs to address. hopefully we will do another program to delve into that. >> we will leave it there. , theessman joe courtney lead voice for house democrats on this issue. we appreciate your time. thank you. >> let me turn to reporters here. talk about where we are headed. beforere 10 days to go the rate for some new loans goes up. >> that is right. we went through this last year at the same time. there is this increasing push to say we need to do some about it.

bitgs are a little different now. there is not a presidential campaign which changes the dynamic in a significant way. you do not have president obama out there saying i'm the person who has your back. that spotlight is not there. doing a little better. does that change the dynamic of what we are looking for? that message that we have to do everything who need speed will. a little bit less there. there are a whole of changes that take place. couldls show both parties suffer some political fallout if they do not solve that. is that true? whenes the rate go up people suck it up and pay more? toare you not going back school because you have higher interest rates?

you will finish your degree one way or another. it will cost you more. >> it is about what? a thousand dollars over the year? >> $8,000 per year. basically taking up for college loans. $8,000 per loan per year. it is more over the lifetime. , everyone is playing politics with this. not a day goes by that i do not sit on a conference call wondering if there is so much passion about having a fix for this, why is nothing getting done? it is an easy attack ad. both sides are doing it. speaker boehner lets him ring on the president. it is time for him to lead. house republicans boxed him in on this and took a page out of the president's budget and put significantas some details but not deal breaking details.

he put forward the lan and said ok. i didn't you to vote against this. a have been able to say senate democrats to not agree on the loans and that is creating a lot of frustration among both parties, especially among student advocates. >> the real hurdle is in the senate. you are the players? they put this through. we are back to trying to cobble out some sort of bipartisan agreement. you can look to the senators on that issue. the goal going forward is going to be some sort of bipartisan deal. on the student loan issue, at the house has not taken this approach were say we are not going to do any in until the senate acts.