Senator Jay Rockefeller today issued the following statement after the Senate passed compromise legislation, the Bipartisan Student Loan Certainty Act of 2013, which will cut rates on all new student loans this year and promises to save a typical undergraduate $1,500 over the life of those loans.
"This compromise bill averts an immediate crisis by lowering interest rates for students over the next few years. We want to encourage our students to get higher degrees and follow their dreams, not weigh them down in debt they'll never be able to pay off," said Rockefeller. "But I'm still very concerned about the higher costs students could see in the long run because of this bill. This compromise is an important first step, and I'm committed to continuing to protect our students and graduates from astronomical loan rates. We also need to focus more attention on the biggest challenge that our students face -- the rising cost of college tuition. Every student deserves an affordable college education, and we need to take a hard look at real solutions to make that possible."
The Bipartisan Student Loan Certainty Act of 2013 will initially decrease student loan interest rates, but in the future, fixed rates would be determined annually by market conditions and the bill will cap how high student loan interest rates can rise. The Congressional Budget Office estimates the bill will save $715 million over ten years.
Background:
Rockefeller helped introduce the Keep Student Loans Affordable Act, which would have reversed the recent rate hike on new subsidized Stafford student loans by retroactively setting the interest rate to 3.4 percent for any subsidized Stafford loan made between July 1, 2013 and June 30, 2014. The bill did not have enough support to pass the Senate.
According to the West Virginia Center on Budget and Policy, the average debt of a graduate of a West Virginia four-year public college is now more than $25,000 -- a level that has grown by $10,000 since 2004. This exceeds the current national average of $23,065 of student loan debt per graduate of four year public colleges.
For the upcoming 2013-2014 school year, more than 67,000 West Virginia students have already taken out federal subsidized Stafford loans. According to the New York Federal Reserve Bank, West Virginia has the highest student loan delinquency rate in the nation at approximately 18 percent, compared to the national average of 11 percent.