LIBRE: Congress Should Review Cost of Higher Education
Student Loan Action an Important First Step
(Washington, D.C.) – Last night, the House of Representatives approved H.R. 1911, the Bipartisan Student Loan Certainty Act of 2013, on a bipartisan vote of 392-31. The bill offers relief to student loan borrowers, retroactively cancelling the doubling of the interest rate on some loans which took place on July 1. It ties rates to the 10-year Treasury note, plus 2.05 percentage points for both subsidized and unsubsidized portions of the undergraduate loans, 3.6 points for graduate loans and 4.6 points for PLUS loans. Rates are locked-in for the life of the loan and capped at 8.25 percent, 9.5 percent and 10.5 percent, respectively.
Jorge A. Lima, Policy Director of The LIBRE Initiative released the following statement:
"College students can be relieved that Congress finally approved legislation to address their student loan interest rates. It is difficult to justify why it took the Senate weeks after the deadline to act, but the legislation does provide retroactive relief. The measure, which the President is expected to sign, links loan rates to the government's cost of borrowing – providing a sustainable market solution which is fair to students and good for taxpayers. That said, overall student loan debt now exceeds $1 trillion, and college graduates are increasingly unable to find work or pay back their loans. The system is broken. Washington should review the efforts of some states to reduce the cost of higher education, and encourage innovation."