Today, Rep. Bruce Braley (IA-01) joined Rep. Joe Courtney (CT-02) to introduce the Student Loan Affordability Act, which would extend the current low interest rate for federally subsidized loans for two additional years. This bill would keep interest rates for these loans at 3.4 percent.
Unless Congress takes action, student loan interest rates will double to 6.8 percent on July 1st. Such an increase would mean a student taking out the maximum Stafford student loan of $23,000 would pay an additional $11,000 of interest over the 20 year repayment period of the loan.
"Iowa college graduates have one of the highest student debt loads in the nation," Braley said. "Piling thousands of dollars more in debt on them puts Iowa students even further behind at graduation.
"Last year Congress narrowly averted a spike in student loan interest rates, but rates are set to double yet again. Allowing student loan interest rates to double would deal a devastating financial blow to college students in Iowa and across the country. We need to act now to stop these interest rates from doubling before this issue becomes a political football.
"Our colleges and universities are avenues of economic opportunity, and we need to keep higher education attainable and affordable for every person who wants to attend."
In 2007, Congress passed the College Cost Reduction and Access Act which lowered federally subsidized Stafford student loan rates from 6.8 percent to 3.4 percent. This act originally expired on July 1, 2012.
In January 2012, Braley co-wrote and introduced legislation to keep the interest rate on federally subsidized Stafford loans at their current level. It was the first legislative proposal in 2012 to block the student loan rate interest hike. Last June, Congress passed a bipartisan compromise to extend the low student loan rates until July 1, 2013.
Text of the bill Rep. Braley introduced today can be found at the following link: http://1.usa.gov/10QCfHX