Today, Congresswoman Corrine Brown voted against the GOP Making College More Expensive Act, which claims to help students but would actually make college more expensive for students and families, forcing them into loans with skyrocketing interest rates that fluctuate year by year, further compounding the student debt crisis. According to the Congressional Budget Office, the bill would charge millions of students and families $3.7 billion over the next decade in additional interest payments relative to current law.
According to the Congressional Research Service, the Republican bill is even worse for students and families than allowing interest rates to double -- with even higher interest payments by students and families. Under the Republican bill, students who borrow the maximum amount of subsidized and unsubsidized Stafford loans over five years would pay nearly $2,000 more in interest costs than if interest rates doubled.
"Our students and families deserve better than this Republican bill that makes many students pay higher interest payments than they would if Congress did nothing and interest rates doubled," said Congresswoman Brown. "In fact, total student debt currently stands at $1.1 trillion, greater than credit card debt, yet instead of reducing student debt, this bill will only increase it."
Under the Republican House bill, interest rates on loans would be reset every year, wherein the interest rate on a loan taken out next year by a freshman may start off low, but the student doesn't get to keep that interest rate for the life of the loan. Instead, the rate changes every year just like predatory adjustable rate mortgages.
Moreover, the House Republican Leadership refused to allow the House to consider the Democratic bill to block student loan rates from doubling on July 1. The Democratic bill continues to allow college students to benefit from historically low interest rates by freezing the current low 3.4 percent rate on subsidized Stafford loans for the next two years. Democrats support long-term solutions to student loan interest rates as part of the upcoming Higher Education Act's reauthorization, when policymakers can tackle student loans as part of comprehensive efforts to address student debt, college costs and affordability, and the financial aid system as a whole.
"Making higher education more expensive inhibits the development of a skilled and competitive twenty-first century workforce, which is integral to maintaining our nation's global leadership. Congress needs to get to work reauthorizing the Higher Education Act so we can address college costs as part of a comprehensive approach. I wholeheartedly urge my Republican colleagues in the House to work with Democrats on a solution before July 1 that will keep student loan interest rates from doubling and help more of our young people afford college," said Congresswoman Brown.