The U.S. Senate Wednesday evening reached a deal that, if signed into law, would stop student loan rates from doubling for the upcoming school year.
A deal to stop the doubling of federal student loan rates for the upcoming school year has been reached in the Senate, adding just a small increase to last year’s rates but likely bringing higher costs to students in future years, USA TODAY reported late Wednesday.
But the bill still isn’t what the United States Student Association (USSA) is looking for from Congress, said Tiffany Loftin, USSA’s president and recent alumna of University of California — Santa Cruz.
“We were really disappointed for this bill,” said Loftin, who leads the Washington, D.C., lobbying group. “We don’t need a long-term solution that’s going to put us deeper in the hole, that’s going to make it harder for people to get into college.”
Senate Majority Leader Harry Reid said the bill would finally put an end to partisan back-and-forth over how to prevent the loan rates from doubling, USA TODAY reported.
“The legislation as presented to me isn’t everything I want, but it’s the work of a number of Democratic and Republican senators working long, long hours,” said Reid, D-Nev.
The USSA has called for a short-term solution that would keep rates low in coming years before creating more permanent policy in the future. In a letter to Reid and Senate Minority Leader Mitch McConnell, R-Ky., the student association joined other education advocacy groups in asking the leaders to revisit the costs of running a student loan program and lending before creating a long-term plan for student loan rates.
“We all want a long-term fix, but making the switch to a long-term plan today, without addressing these fundamental questions, is a mistake that will not make college more affordable nor help students at the economy,” the letter said.
Congress already missed a July 1 deadline to pass legislation on student loan rates, automatically doubling them from 3.4% to 6.8%. The proposed plan in the Senate would fix rates back to 3.85% this year, but would likely increase them in the future by linking interest rates to financial markets.
USA TODAY reported on July 1 that two-thirds of 2011 college graduates had an average student loan debt of $26,600, according to the Project on Student Debt. Eighteen years earlier, less than half of students graduated with debt — and it averaged just $15,000 after adjusting for inflation.
Under the Senate compromise, undergraduate rates could never go higher than 8.25%, a previously contentious issue between Democrats and Republicans. Graduate students will be capped at 9.5%, and parents’ rates will not go above 10.5%.
USSA Legislative Director Kalwis Lo and several college students had the opportunity to stand with President Obama in late May as he called on Congress to meet its July 1 deadline. Loftin said it was important for USSA that Obama invited a representative to be part of the address.
“It doesn’t make sense to not have students be a part of the conversation when the conversation revolves around what’s going to be happening for students,” she said. “And so we directly need the support of people who are in college to be involved in these discussions.”
In its lobbying efforts for students, USSA has been an active opponent of rising student debt rates. It partnered in March with the Roosevelt Institute to write a policy recommendation on how to change the payment structure of higher education, leading to a proposed plan in the House that would encourage the federal government to forgive debt if students make regular and substantial payments for 10 years. The House never voted on that plan.
The Senate Compromise still must be approved in both the U.S. Senate and House of Representatives before Obama can sign it into law. Those votes could happen later today or next week.
A House GOP aide told USA TODAY the Senate compromise is likely to pass because the House had already approved similar legislation. The aide declined to speak publicly because the House leaders have not yet openly endorsed the bill.
If the legislation does pass in coming weeks, it will take effect in time for the beginning of school in fall, when many families take out loans to pay for college.
Powered by Facebook Comments