Keep Student Loan Rates from Doubling On July 1st
Dear Friend,
With student loan rates set to double on Monday, July 1st, I called on the House yesterday to immediately bring up legislation I co-authored, H.R. 1595, the Student Loan Relief Act. This bill would allow college students to benefit from historically low interest rates by freezing the current 3.4 percent rate on subsidized Stafford loans for the next two years. Unfortunately, the House Majority wouldn't allow my bill to come to up for consideration.
Students and the thousands of hardworking families across our nation already carry $1 trillion in student loan debt. Allowing these rates to double undermines our economy, weakens our middle class, and puts college out of reach for millions of students. Congress needs to act now. Time is running out.
The House Majority recently passed legislation, H.R. 1911, which would make college more expensive for students and families by forcing them into loans with interest rates that fluctuate year by year.
Under H.R. 1911, interest rates on loans would be reset every year. So, the interest rate on a loan taken out next year by a freshman may start off low, but she doesn't get to keep that interest rate for the life of the loan. It will change every year, potentially skyrocketing.
According to the nonpartisan Congressional Budget Office (CBO), the bill would charge millions of students and families $3.7 billion over the next decade in additional interest payments relative to current law.
The CBO also found that H.R. 1911 is even worse for students and families than allowing interest rates to double on July 1st as currently scheduled. Under H.R. 1911, students who borrow the maximum amount of subsidized and unsubsidized Stafford loans over five years would pay nearly $2,000 more in interest costs than if interest rates doubled.
Our students and families deserve better than a bill that makes many students pay higher interest payments than they would if Congress did nothing and interest rates doubled.
The one essential element to our nation's long-term economic success is education. Instead of passing bills that would increase the debt burden for students and families, we need to work together to keep college costs down. The bill I've co-authored would do just that.
Sincerely,
Mike Thompson
Member of Congress