IO: GOP Student Loan Plan Would Hurt Ohio

For Immediate Release:  May 7, 2012
Contact:  Dale Butland, 614-783-5833

IO: GOP Student Loan Plan Would Hurt Ohio

Think Tank Says Gutting Illness Prevention Fund Would Cost Ohio Millions and Hurt Women and Children

Columbus: Innovation Ohio, a progressive think tank headquartered in Columbus, issued a report today which finds that eliminating the Prevention and Public Health Fund of the Affordable Care Act would cost Ohio millions of dollars in federal funds and have a disproportionately adverse effect on women and children.
The Republican-dominated U.S. House of Representatives voted (HB 4628) to zero out the fund in order to pay the $6 billion cost of keeping interest rates on federal student loans at 3.4%.

The U.S. Senate is considering a bill co-sponsored by Ohio Senator Sherrod Brown (S. 2343) that would keep the lower interest rate, but pay for it by closing a loophole that allows wealthy owners of privately held “S-Corporations” to avoid paying Social Security and Medicare taxes.

Without congressional action, interest rates for Stafford college loans will double to 6.8% on July 1, thus costing many college students and their families an extra $1,000 in interest payments.  An estimated 380,000 Ohio students use Stafford loans to pay for college.

Among the IO Report’s main findings are:

  • The average Ohio college student graduates with loan debt of $27,713, higher than the national average of $25,000;
  • Total student loan debt now exceeds $1 trillion, more than the nation’s total credit card or car loan debt;
  • Allowing interest rates on new Stafford loans to double to 6.8%  would saddle students who borrow the maximum amount with an extra $1,000 per school year in added  interest, potentially forcing many Ohioans to change colleges or drop out altogether;
  • Keeping student loan interest rates at 3.4% would cost $6 billion.  Eliminating the Prevention and Public Health Fund (PPHF) as House Republicans propose would cut $11.9 billion, twice as much as is needed to pay for the lower interest rates;
  • Since 2010, Ohio has received $17 million in Prevention Fund grants;
  • Eliminating the PPHF would de-fund programs used by over 2 million Ohioans, nearly 1.4 million of whom are women and children.  Among the most important are programs for breast and cervical cancer screenings, child immunizations, smoking cessation, and local projects to combat heart disease, strokes and diabetes;
  • Prevention programs are especially important to Ohio because we already rank near the bottom for many of these diseases and conditions.  For example, Ohio ranks 47th (third worst among the 50 states) in breast cancer deaths, 46th in smoking rates, 40th in lung cancer deaths, and 42nd in both heart disease and diabetes.

Said IO President Janetta King:

“Ohio college students and their families are already swimming in debt and can’t afford to see their loan interest rates double.  But it’s cynical politics and poor public policy to insist that the only way to help college students is by hurting the health of women and children.

“Nor do the budget numbers suggest that it’s necessary. If keeping interest rates from doubling costs $6 billion, why do House Republicans insist on cutting $12 billion?

“If stopping illness before it starts is cheaper than treatment, why are Republicans targeting an illness prevention Fund that provides services to over 2 million Ohioans?

“No, the House Republican bill isn’t about saving money. It’s about the Republican obsession with undoing health care reform. And it’s also about their willingness to say and do anything to preserve tax breaks for the wealthiest Americans –even if it comes at the expense of those truly in need of help.”

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The report can be found here.