Congress must take action soon to stop Stafford student loan interest rates from doubling on July 1st. However, the legislation passed by the House of Representatives today is projected to more than double the current 3.4 percent interest rates. The Republican bill would link federal student loan interest rates to the variable rate changes of a 10 year Treasury note, a baseline for general interest rates, which the Congressional Budget Office projects will increase and in effect raise student interest rates to 7.4% by 2017. Congressman Smith released the following statement after he opposed this legislation:
"It is critical for the fiscal health of our country to reduce the deficit, but we cannot do so at the expense of aspiring college graduates," Smith said. "College is already too expensive with high interest private loans and the ever increasing cost of tuition. Congress should be helping hard-working families and students afford a college education, not making it more difficult by potentially doubling student interest rates with this type of legislation."
There was an amendment offered by Representative Courtney that would have extended the 3.4 percent student interest rates for another 2 years. Congressman Smith supported this amendment, but it was not considered on the House floor.