House and Senate Democrats to Introduce Legislation to Keep Student Loan Interest Rates Low
WASHINGTON – House and Senate Democrats announced today that they will introduce legislation to keep college students’ loan rates from doubling on July 1st. The “Stop the Student Loan Interest Rate Hike Act of 2012” keeps interest rates on need-based student loans at 3.4 percent next year for the more than 7 million borrowers. This will save the average borrower $1,000 in loan repayment costs. The bill will be fully paid for by closing a tax loophole that some of the wealthiest Americans use to avoid taxes.
“We should be doing everything we can to put higher education within reach for every American,” said Rep. George Miller (D-CA), the senior Democrat on the House Education and the Workforce Committee. “But last month, House Republicans voted for a budget that relies on hiking student loan interest rates while this month they voted to cut taxes again for millionaires and billionaires. I urge them instead to join me and my Democratic colleagues in standing up for students by stopping the hike. The clock is ticking. The time to act is now.”
Earlier this year, Miller and Ruben Hinojosa (D-TX), the senior Democrat on the Higher Education and Workforce Training Subcommittee, wrote the Republican Chairman of the House Education and the Workforce Committee John Kline (R-MN) asking the committee to take action. Thus far, Republicans have taken no action. Last week, House Republicans instead passed a $46 billion tax bill providing the wealthy with an average of $58,000 in new tax breaks next year.
“We cannot let more than 7 million students nationwide see their student loan interest rates double on July 1st . That is why we are introducing a common sense, fiscally responsible bill that would extend the 3.4% interest rate for an additional year. We must protect middle-class students from these higher loan rates. Congress should act quickly and pass this bill,” said Rep. John Tierney (D-MA).
“Congress must not allow student loan rates for college students to double, adding an extra $1,000 to the debt of the average borrower. I appreciate the President’s focus on this critical issue for middle class families and hope Republicans will join Democrats to provide relief to 7.4 million students in a responsible way, which is especially important in this tough job market for recent graduates and for our long-term economic recovery,” said Rep. Tim Bishop (D-NY).
"I am deeply concerned about the cost of higher education and the ever-increasing amount of debt that students are being saddled with. According to the Consumer Financial Protection Bureau, total outstanding student loan debt surpassed $1 trillion late last year, exceeding credit card debt for the first time. Congress can help students and families afford the cost of a college education now by freezing interest rates for need-based loans for more than 7 million students and keeping them from doubling to 6.8 percent on July 1st," said Rep. Ruben Hinojosa (D-TX).
“In 2007, the College Cost Reduction and Access Act, which enacted the 3.4-percent rate, was signed into law with strong bipartisan support,” said Rep. Joe Courtney (D-CT). “I am disappointed that at this point, not a single Congressional Republican has stepped up to support the effort to keep rates there. With just 67 days remaining to prevent this rate hike from going into effect, I am pleased to join my colleagues in support of a one-year fix; however, I remain committed to finding a long-term solution that helps working-class families avoid piling on additional student-loan debt.”
“The Stop the Student Loan Interest Rate Hike Act of 2012 achieves two important goals. We need to close the S corporation loophole that allows wealthy, self-employed lawyers and lobbyists to slash their tax liability, which is why I originally introduced the Narrowing Exceptions for Withholding Taxes (NEWT) Act in the House. We must also ensure that a college education is both accessible and affordable for all young Americans. These critical matters of fairness are both addressed by this legislation,” said Rep. Pete Stark (D-CA).