On Thursday, the Senate is expected to vote on the Student Loan Affordability Act of 2013 (S. 953), legislation co-sponsored by U.S. Senator Tammy Baldwin to close wasteful special interest tax loopholes in order to prevent a hike in student loan interest rates for over 159,000 students in Wisconsin.
With student loan interests rates set to double on July 1, Baldwin repeated her call today for Congress to act and pass the Student Loan Affordability Act. Without Congressional action, need-based student loan interest rates will double on July 1st, from 3.4 percent to 6.8 percent, meaning students will pay an additional $1000 for each loan.
"Wisconsin families and students cannot afford to have student loan interests rates double. It is time for Congress to take action. This is a common sense solution that is built on fairness," Baldwin said, "By closing special interest tax loopholes we can ensure college affordability and strengthen the economic security of Wisconsin families and students."
According to the Wisconsin Technical College System, 44,768 students at Wisconsin's 16 technical colleges had $129,592,161 worth of Subsidized Stafford Loans in 2011-12.
According to the University of Wisconsin System, 72 percent of UW System resident students graduated with loan debt in 2011-12, with an average loan debt of $28,002.
82,227 students at the UW System's 26 colleges and universities had $356,617,455 worth of Subsidized Stafford Loans in 2011-12.
In Wisconsin, 159,147 students have taken out $591,341,448 worth of Subsidized Stafford Loans for the 2013-14 academic school year.
The Student Loan Affordability Act of 2013 (S. 953) prevents need-based student loan interest rates from doubling on July 1st. The bill protects students by freezing need-based student loan interest rates at 3.4 percent for two years. The legislation is fully paid for by closing three tax loopholes. Specifically, the bill would: limit the use of tax-deferred retirement accounts as a complicated estate planning tool; close a corporate offshore tax loophole by restricting "earnings stripping" by expatriated entities; and close an oil and gas industry tax loophole by treating oil from tar sands the same as other petroleum products.