Congressman Bob Goodlatte released the following statement after voting in support of H.R. 1911, the Smarter Solutions for Students Act, which moves all federal student loans (except Perkins loans) originating after July 1, 2013, to a market-based interest rate:
"The Smarter Solutions for Students Act removes politicians from the student loan equation and provides a long-term solution to end confusion and uncertainty surrounding student loan interest rates. Students have enough to focus on during the school year, and this bill gives them peace of mind knowing that their student loan repayments will be stable into the future. This legislation is all about giving students and their families certainty that their investment in higher education and a brighter future will not be thwarted by student loan interest rates that are subject to political whims. Passage of the bill today provides a solution that keeps costs at reasonable rates for students and is a fiscally prudent investment by the United States government that works for students, families, and taxpayers."
Background -- The Smarter Solutions for Students Act:
* Calculates subsidized and unsubsidized Stafford loans using a formula based on the 10-year Treasury Note plus 2.5 percent.
* Calculates graduate and parent PLUS loans using a formula based on the 10-year Treasury Note plus 4.5 percent.
* Resets student loan interest rates once a year, allowing rates to move with the free market and ensuring borrowers can take advantage of lower interest rates when available.
* Protects borrowers in high interest rate environments by including a 8.5 percent cap on Stafford Loan interest rates and a 10.5 percent cap on PLUS loans.