Instead of keeping student loan rates low, Congress will vote to reduce oversight of federal student aid: News of the Day

Feb 27, 2012 Issues: Education, Higher Education

Instead of preventing the doubling of interest rates for millions of students loans this summer, Congress is expected to take up a bill Tuesday that would compromise the Department of Education’s ability to oversee and safeguard our federal investment in higher education.

In 2007, Democrats enacted a plan, the College Cost Reduction and Access Act, that sliced the interest students pay on the subsidized, need-based loans in half. Unfortunately, these interest rates will expire, doubling from 3.4 percent to 6.8 percent in July if Congress fails to act. If this happens, more than 7 million students will face an average of $2,800 increase in their borrowing costs.

In light of this pending increase, President Obama called on Congress to prevent the doubling of student loan interest rates in a speech before the National Governors Association today.

“We can’t allow higher education to be a luxury in this country. It’s an economic imperative that every family has to be able to afford. And, frankly, I don't think any of this should be a partisan issue. All of us should be about giving every American who wants a chance to succeed that chance...

“Congress still needs to do its part by, first of all, keeping student interest rates low. Right now, they are scheduled to double at the end of July if Congress does not act. And that would be a real tragedy for an awful lot of families around the country. They also need to extend the tuition tax credit for the middle class, protect Pell grants, and expand work-study programs.”

Despite calls to work together to prevent this from happening, House Republicans have so far refused to act.

Past Democratic Congresses have taken significant steps to make higher education more accessible for families for whom a degree may have been out of reach. Democrats believe that our nation should invest in helping young Americans have the opportunity to gain the skills and training needed to be successful in the 21st century.

Read more about how House Republicans may let student loan interest rates double.