Rep. Raúl M. Grijalva today called on House and Senate Republicans to support the Keep Student Loans Affordable Act (H.R. 2574), which maintains the 3.4 percent interest rate on subsidized Federal Direct Stafford Loans that existed until this morning. The new rate of 6.8 percent will mean an estimated additional $2,600 in costs for approximately 7 million students, according to the Congressional Joint Economic Committee.
Grijalva is supporting an effort to file a discharge petition on the bill, which would force Speaker of the House John Boehner to schedule a vote on it. A discharge petition needs 218 signatures, a bare majority of the House, to be successful. Even 2012 Republican presidential candidate Mitt Romney supported extending the 3.4 percent rate for another year, Grijalva pointed out.
"This was never meant to be controversial or get mired in politics," Grijalva said. "This is about preventing financial hardship for students all over the country. They're going to school, just as we tell them they should, and don't need us to inflict any extra financial hardships on them now. We have a solution in our hands, and no purpose is served by playing games with this."
Grijalva has already signed the discharge petition and indicated his support for H.R. 2574, which would set the interest rate for any subsidized Stafford loan made between July 1, 2013 and June 30, 2014 at 3.4 percent.
The House passed a Republican bill earlier this year that would greatly increase costs for families over time, according to the non-partisan Congressional Research Service. As the Associated Press reported in May:
Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 percent. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000. [. . .] For students who borrow the maximum subsidized and unsubsidized Stafford loans, they would pay $12,374 in interest under the Republican bill. The interest charges would be $10,867 if subsidized loans were allowed to double in July, or $7,033 if rates stay the same. The maximum available in subsidized and unsubsidized amounts is $27,000.
"We're not saving taxpayers money by charging students more," Grijalva said. "We're just making it harder for families and students to figure out how to afford college. If Republicans think no one's paying attention to how this is going down, they're in for a very rude awakening."