Congressman Robert C. "Bobby" Scott issued the following statement on his 'No' vote on H.R. 1911, legislation to alter the interest rate charged on federal student loans:
"In 2007, Congress cut the interest rate on student loans in half from 6.8% to 3.4% for five years. Last year we extended that benefit for one year. But, on July 1st, without Congressional action, student loan interest rates are scheduled to double back to 6.8%. In response, my Republican colleagues brought this bill to the floor of Congress.
"Unfortunately, according the Congressional Research Service, students would be actually worse off under the proposed Republican legislation than they would be if Congress did nothing and just let the interest rate double to 6.8%.ÂÂ The bill would make rates variable for the life of the loan, therefore forcing students to sign up to an interest rate that will fluctuate over time and according the the Congressional Research Service, reach levels far exceeding even 6.8% when present low rates return to their historic averages.
"This bill is significantly different from the variable interest proposals advocated by Democrats: in these proposals, the interest rate is variable based on current market prices, but once a student signs the loan, the rate would remain fixed for the duration of the loan. Under Democratic proposals, students would benefit from historically low interest rates, without the risk of future rate adjustments.
"As a Member of Congress, I am committed to ensuring that students are not completely overwhelmed with debt upon graduation and I am hopeful that Congress will work to continue to make higher education more affordable and ensure that student loan interest rates are reasonable."