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Vote Alert


NTU urges all Senators to vote "No" on S. 2432, the "Bank on Students Emergency Loan Refinancing Act."

June 11, 2014


NTU urges all Senators to vote “No” on S. 2432, the “Bank on Students Emergency Loan Refinancing Act.” This legislation would further expand federal intrusion in the student loan market and raise taxes.

S. 2432 exacerbates many of the problems associated with the excessive involvement of the federal government in the student loan market. Permitting current holders of student loan debt to refinance at current preferential interest rates comes at a significant cost to taxpayers. The true costs of taxpayer-backed loans are already notoriously underestimated, whether one is considering the cheap credit available to students or large corporations via the Export-Import Bank. By avoiding fair-value estimates of loans, S. 2432 and other government loan schemes hide the true risk involved in financial decisions and create market distortions elsewhere. S. 2432 compounds this problem by allowing privately held student loan debt to effectively become publicly held debt, further exposing taxpayers to greater and greater risks. S. 2432 does little to address the real drivers of burdensome student loan debt and indeed could further encourage colleges to inflate their prices. All the while, moral hazard could worsen, as young people would in essence be encouraged to take on more debt with the expectation that in the future they would receive an even more generous rescue package.

Increasing taxes to pay for the bill via the repeatedly debunked “Buffett Rule,” adds insult to injury for taxpayers who are being put on the hook for hundreds of billions more in student loan debt. This targeted tax increase ignores progressivity already built into the Tax Code while subjecting investments to multiple, punitive layers of taxation. Despite heated rhetoric demanding they "pay their fair share," the truth is that "the rich" already shoulder the largest share of financing government. According to a December 2013 Tax Foundation report, “The top 50 percent of all taxpayers paid 97 percent of all income taxes; the top 5 percent paid 57 percent of all income taxes; and the top 1 percent paid 35 percent of all income taxes in 2011.” By primarily targeting individuals with large amounts of capital gains and dividend income, the Buffett rule would set us on a course to crushing tax rates. Enacting the Buffet rule on top of current investment taxes would yield staggeringly high penalties on the very activity our economy needs for a robust recovery. It would also place us out of step even with high-tax European countries, virtually all of which give preferential treatment to investment income to reduce the impact of double-taxation.

Rather than extending the harmful government meddling in the student loan market, Congress should be looking at ways to get out of the higher education business. 

Roll call votes on S. 2432 will be significantly weighted in our annual Rating of Congress and a “No” vote will be considered the pro-taxpayer position.

If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700