Today, Representative Tim Walz (D-MN) voted against H.R. 1911, a bill that would increase the cost of college for hardworking, middle class families and students, forcing them into loans with fluctuating, rising interest rates, that won't allow students to take advantage of the historically low interest rates. If Congress fails to act by July 1, 2013 interest rates on subsidized student loans will double from 3.4 percent to 6.8 percent.
"As teacher and a parent, I know how critical a high-quality education is to our country's economic future and I also know how much anxiety middle class families feel about the rising cost of college," Walz said. "While I appreciate the Chairman's efforts to address the issue, unfortunately the bill today is not the answer students and middle class families need or are looking for."
The Minnesota State College Student Association and the Minnesota State University Student Association, representing 100,000 students across Minnesota, also opposes H.R. 1911.
According to a non-partisan report by the Congressional Research Service, H.R. 1911 would leave students with more debt than if rates were to double on July 1.
Specifically, CRS found that:
Students who borrow the maximum amount of subsidized Stafford loans over five years would pay $10,109 in interest payments under H.R. 1911, $8,808 if rates are allowed to double to 6.8 percent in July, or $4,174 if rates were kept at 3.4 percent.
Students who borrow the maximum amount of subsidized and unsubsidized Stafford loans over five years would pay $14,430 in interest under H.R. 1911, $12,598 if subsidized loans were allowed to double in July, or $7,965 if rates don't double.
Parents and graduate students would also pay more under H.R. 1911. For instance, a parent who borrows the maximum amount for their child over five years would face $35,848 in interest payments under H.R. 1911, more than the $27,956 under current law.
Students at Minnesota public and private universities currently graduate with an average debt load of nearly $30,000--the third highest in the county.
"We should be encouraging access to higher education, not creating hurdles to it," added Walz.
In 2007, Representative Walz supported the College Cost Reduction and Access Act, which made historic investments in the future of our country. The law halved interest rates on need-based Stafford student loans to 3.4 percent-- making them more affordable for low and middle-income students. If Congress doesn't act before July, the rate will jump back up to 6.8 percent, making it much more difficult for hard working students and middle class families to afford a college education.
While Walz believes that H.R. 1911 is not the answer, he is committed to working with his colleagues on both sides of the aisle to find a solution before July 1.
"The path to the American Dream runs through college campuses across this nation. Allowing interest rates to double will make college more expensive and it will make the American Dream for over 200,000 Minnesota students that much harder to realize," Walz concluded.