WASHINGTON, July 1 -- Rep. Jan Schakowsky, D-Ill. (9th CD), issued the following statement:
Today, rates for new student loans will increase from 3.86 percent to 4.66 percent for undergraduate students, from 5.41 percent to 6.21 percent for Stafford loans for graduate students, and from 6.41 percent to 7.21 percent for graduate and parent plus loans.
This did not have to be the case. I'm a cosponsor of the Student Loan Fairness Act, which would cap rates for federal student loans at 3.4 percent - preventing the increases that go into effect today. I'm also a cosponsor of H.R. 4582, the Bank on Student Emergency Loan Refinancing Act (Senator Elizabeth Warren's bill), which would allow existing federal and private student loan borrowers to refinance their loans last year's rates. Passing this legislation now would help make higher education affordable for those who are willing to work hard to get ahead. H.R. 1330 and H.R. 4582 would be good first stepsto fixing this huge problem.
According to the Consumer Financial Protection Bureau, federal student loan debt now tops $1 trillion. Student loan debt also exceeds the total of credit card debt, and today's increases will just add to the problem. Our country suffers when we price higher education out of the reach of students or leave them with years of carrying an enormous debt burden. That debt load harms our economy by preventing people from purchasing homes, buying cars and starting families. We need to act now to roll back higher rates and to pass a long-term solution to the student loan crisis.
Millions of borrowers need Congress to pass a permanent solution to reduce interest rates on federal student loans and ease the burden on students and their families. Interest rates on federal student loans should be set no higher than the rate needed to ensure we recoup the cost of administering the program. The federal government shouldn't profit by making education less affordable for students, but the CBO forecasts that the Treasury will receive $127 billion over the next 10 years by charging higher than needed interest rates.
We can no longer allow this. We should not be making a profit at the expense of our students. This is both unfair and foolish. President Barack Obama recently took steps within his existing authority to make college more affordable. Those steps include extending the Pay As You Earn program to all existing borrowers, increasing public outreach to students and families about education tax benefits, and ensuring that federal student loan services do all they can to help students stay current on their student loan repayments.
I applaud President Obama's actions but it is now time for Congress to act. We must pass legislation that makes college more affordable for new and existing borrowers. It is our responsibility to make it easier and more affordable for our future generation of leaders to attend college. I urge my Republican colleagues to make solving the student loan crisis a priority and let us vote on legislation to deliver help to students and families who are struggling to pay for college.