WASHINGTON, D.C. | April 20, 2012
U.S. House Committee on Education and the Workforce Chairman John Kline (R-MN) issued the following statement today as President Obama begins his campaign push to temporarily freeze the interest rate on subsidized Stafford Loans made to undergraduate students:
“Bad policy based on lofty campaign promises has put us in an untenable situation. We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers. I have serious concerns about any proposal that simply kicks the can down the road and creates more uncertainty in the long run – which is what put us in this situation in the first place. My colleagues and I are exploring options in hopes of finding a responsible solution that serves borrowers and taxpayers equally well.”
In 2006, Democrats made a series of campaign promises to the American people, including a pledge to cut student loan interest rates in half. After gaining control of Congress in 2007, then-Speaker Nancy Pelosi (D-CA) and Rep. George Miller (D-CA) championed H.R. 2669, legislation that only temporarily phased down interest rates for subsidized Stafford Loans made to undergraduate students over four academic years, at which point the rate would revert back to 6.8 percent.
In the thick of the 2012 election cycle, the president and Democrats in Congress have once again called for a temporary reduction in subsidized Stafford Loan interest rates, yet no one has offered any meaningful solutions to pay for the proposal. According to the nonpartisan Congressional Budget Office, extending the 3.4% interest rate on subsidized Stafford Loans made to undergraduate students for one year would cost roughly $6 billion.
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