WASHINGTON, D.C. | May 16, 2013 -
As many of us know, on July 1, today’s 3.4 percent subsidized Stafford Loan interest rate is set to double to 6.8 percent for millions of current students – all because elected officials made a promise they couldn’t afford to keep for the long-haul.
Student borrowers shouldn’t have to ride the roller coaster of political largesse wondering every year whether Congress will intervene in time to adjust their student loans. And taxpayers shouldn’t be expected to foot the bill whenever members of Congress promise more than they can deliver.
For the sake of students, families, and taxpayers, before July 1 we need to move our federal student loan programs away from politics. Student loan rates should not be subject to the whims of Washington or seized as bargaining chips.
The Smarter Solutions for Students Act will remove politics, uncertainty, and confusion from the rate-setting equation and instead anchor student loan interest rates on the 10 year Treasury Note – not just for four years – but for good.
By tying rates to the market, the Smarter Solutions for Students Act establishes a predictable rate for loan calculation, insulated from the politics and posturing of Washington.
Committee Republicans aren’t alone in finding the answer for predictability in the market. President Obama offered a similar market-based interest rate plan in his 2014 budget proposal and my colleagues on the other side of the aisle have also voiced openness to utilizing the market to set interest rates.
We hope to build on this common ground and continue working in good faith with all interested parties to improve the Smarter Solutions for Students Act and get it to the President’s desk.
Students, families, and taxpayers deserve a long-term solution – not more can-kicking from Washington.
The Smarter Solutions for Students Act puts an end to the temporary fixes and campaign promises that have failed to strengthen our nation’s student loan system. This legislation offers predictability, simplicity, and will ensure interest rates are immediately in line with the free market – a need particularly acute in today’s jobless economy.
The American people deserve the clarity, certainty, and protection the Smarter Solutions for Students Act offers. I am pleased to offer this Amendment in the Nature of a Substitute, which makes minor technical corrections to the bill, and urge my colleagues to support the underlying legislation.
# # #