REP. MIKE THOMPSON VOTES TO PASS BIPARTISAN STUDENT LOAN AGREEMENT
July 31, 2013
U.S. Rep. Mike Thompson (CA-5) today voted to pass bipartisan compromise legislation (H.R. 1911) that will help keep down student loan interest rates, allowing students to take advantage of historically low interest rates. The Senate passed the agreement by a bipartisan vote of 81 to 18 on July 24th. The House passed the legislation by a bipartisan vote of 392 to 31. The bill will now go to the President for his signature.
“Our middle class will continue to struggle and our economy will never reach its full potential if we don't work together to make college more affordable for working families,” said Thompson. “This agreement is a positive step that will save students and their families thousands of dollars. Now, Congress must continue working to make sure no student is ever denied a college education because he or she can't afford it.”
The bill sets the interest rates for subsidized and unsubsidized undergraduate loans at 2.05 percent above the current rate of the 10-year Treasury note. The bill sets unsubsidized graduate loans at 3.6 percent above the 10-year Treasury note. Graduate PLUS loans are set at 4.6 percent above the 10-year Treasury note. Rates are capped at 8.25 percent for undergraduate loans, 9.5 percent for unsubsidized graduate loans, and 10.5 percent for PLUS loans. The bill allows students to lock in today's low interest payments for the life of the loan, so they will know how much they will owe before taking out a loan.
The 10-year rate at the most recent Treasury auction was 1.81 percent, meaning that for Academic Year 2013-2014, the interest rate would be 3.86% for subsidized and unsubsidized undergraduate Stafford loans compared with 6.8% currently.
The new rates are retroactive for any loans taken out since July 1, 2013.
Over the 2013-2018 period, undergraduate students will save $25 billion compared to the current law's 6.8 percent interest rates, according to the Congressional Budget Office. A freshman undergraduate student, who begins school this year and takes out the maximum amount of loans, will save $3,300 on his or her interest payments.
Congressman Mike Thompson is proud to represent California's 5th Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma Counties. He is a senior member of the House Ways and Means Committee and the House Permanent Select Committee on Intelligence. Rep. Thompson is also a member of the fiscally conservative Blue Dog Coalition and chairs the bipartisan, bicameral Congressional Wine Caucus.
“Our middle class will continue to struggle and our economy will never reach its full potential if we don't work together to make college more affordable for working families,” said Thompson. “This agreement is a positive step that will save students and their families thousands of dollars. Now, Congress must continue working to make sure no student is ever denied a college education because he or she can't afford it.”
The bill sets the interest rates for subsidized and unsubsidized undergraduate loans at 2.05 percent above the current rate of the 10-year Treasury note. The bill sets unsubsidized graduate loans at 3.6 percent above the 10-year Treasury note. Graduate PLUS loans are set at 4.6 percent above the 10-year Treasury note. Rates are capped at 8.25 percent for undergraduate loans, 9.5 percent for unsubsidized graduate loans, and 10.5 percent for PLUS loans. The bill allows students to lock in today's low interest payments for the life of the loan, so they will know how much they will owe before taking out a loan.
The 10-year rate at the most recent Treasury auction was 1.81 percent, meaning that for Academic Year 2013-2014, the interest rate would be 3.86% for subsidized and unsubsidized undergraduate Stafford loans compared with 6.8% currently.
The new rates are retroactive for any loans taken out since July 1, 2013.
Over the 2013-2018 period, undergraduate students will save $25 billion compared to the current law's 6.8 percent interest rates, according to the Congressional Budget Office. A freshman undergraduate student, who begins school this year and takes out the maximum amount of loans, will save $3,300 on his or her interest payments.
Congressman Mike Thompson is proud to represent California's 5th Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma Counties. He is a senior member of the House Ways and Means Committee and the House Permanent Select Committee on Intelligence. Rep. Thompson is also a member of the fiscally conservative Blue Dog Coalition and chairs the bipartisan, bicameral Congressional Wine Caucus.
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