May 23, 2013
TODAY IN CONGRESS: House Republicans to Pass ‘Students Pay More’ Act
House Republicans are set today to pass yet another bill that shows their true colors – the “Students Pay More Act” – charging students more for their college loans. House Republicans’ plan would force student loan recipients to pay thousands more in interest payments for the same exact types of loans, with the Associated Press describing how “student loan rates could steadily climb and cost students more over the long haul under the plan House Republicans are considering.” The average college graduate has $26,000 in student loan debt.
While they make student loans more expensive, Republicans refuse to end taxpayer subsidies to Big Oil companies already making record profits.
“With today’s vote, House Republicans will show yet again that they would rather subsidize big oil companies than make sure college is affordable,” said Emily Bittner of the Democratic Congressional Campaign Committee. “Instead of solving the problem of loan rates that will double at the end of the month, House Republicans are putting a bigger burden on the backs of future students. Students already pay enough for college – but now House Republicans want them to shell out even more in crushing interest payments for the same loans. Today’s vote on increasing student loan costs over the long term is a simple question of priorities, and House Republicans are yet again standing with corporate special interests and against hardworking middle class families.”
AP: House Republican Plan Would Raise Student Loan Interest Rates Up to 8.5 Percent. According to the Associated Press: “Under the GOP proposal, student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. For instance, students who receive subsidized or unsubsidized Stafford student loans would pay the Treasury rate, plus 2.5 percentage points. Using Congressional Budget Office projections, that would translate to a 5 percent interest rate on Stafford loans in 2014, but the rate would climb to 7.7 percent for loans in 2023. Stafford loan rates would be capped at 8.5 percent, while loans for parents and graduate students would have a 10.5 percent ceiling under the GOP proposal.” [Associated Press, 5/16/13]
- Headline: Republicans move forward with student loan plan that could mean higher rates later [Associated Press, 5/16/13]
Under the House Republican Plan, Graduates Would Pay Almost $5,000 More in Student Loan Interest. The Associated Press reported: “In real dollars, the GOP plan would cost students and families heavily, according to the nonpartisan Congressional Research Service. The office used the CBO projections for Treasury notes’ interest rates each year. Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 percent. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000.” If the Republican plan were implemented, college graduates would pay $4,881 more in interest, compared to the current rate. [Associated Press, 5/16/13]
The Average College Graduate Has $26,600 in Student Loan Debt; Total National Student Loan Debt Exceeds $1.1 Trillion. According to the Washington Post: “A recent report from the Consumer Financial Protection Bureau estimates that there 38 million student loan borrowers in the United States and the total debt load has passed $1.1 trillion. The Project on Student Debt has estimated that 66 percent of graduating college seniors in 2011 had some student loan debt, with an average balance of $26,600.” [Washington Post, 5/20/13]
CBO: Federal Government Turns $51 Billion Profit on Student Loans. According to the Huffington Post: “The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, a sum greater than the earnings of the nation's most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets. Figures made public Tuesday by the Congressional Budget Office show that the nonpartisan agency increased its 2013 fiscal year profit forecast for the Department of Education by 43 percent to $50.6 billion from its February estimate of $35.5 billion.” [Huffington Post, 5/14/13]
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