Long-term Solution to Preventing Scheduled Student Loan Rate Increases
WASHINGTON, D.C. – U.S. Rep. Glenn ‘GT’ Thompson has voted to advance legislation to address the student loan interest rate increase scheduled for July 1 and to create a long-term student loan system that is predictable and affordable.
The Smarter Solutions for Students Act, H.R. 1991, passed out of the U.S. House Education Committee.
“For too long, Congress has kicked the can down the road and avoided putting forward a long-term plan for college affordability,” stated Thompson. “The House Education Committee took a strong step by strengthening our student loan programs by moving to a rate system that is more reliable and sustainable.”
Under H.R. 1911, student loan interest rates would reset once a year and move with the market. Both subsidized and unsubsidized Stafford loan interest rates would be calculated based on the 10-year Treasury note plus 2.5 percent.
The president’s Fiscal Year 2014 budget included a similar proposal to move to a market-based interest rate. “The Smarter Solutions for Students Act is based on what the president has proposed in his own budget, which I believe is a commonsense approach,” Thompson stated.
“We need a system that offers students the lowest possible cost while ensuring the solvency of these important programs,” Thompson added. “This bill will allow students to take advantage of low interest rates but also protect them with a reasonable rate cap during higher rate environments.”
Absent congressional action, a 6.8 percent interest rate on student loans will take effect on July 1.