Newsletter - Keeping College Affordable by Working Together

Statement

It is worth noting when Congress works together across party lines to find a compromise solution to a challenging national issue. The recent passage of a reform to dramatically reduce interest rates on federally issued student loans is a good example of bipartisan problem-solving.

Without Congressional action, interest rates for new subsidized Stafford Loans, which are issued to students with a demonstrated financial need, would have doubled from 3.4 percent to 6.8 percent. With approximately 7 million students expected to take out these loans for the coming school year, the average borrower would have been forced to pay $2,600 more in interest over the life of their loan and borrowers of the maximum loan amount faced $4,500 in additional interest.

As someone who has spent virtually my entire adult life working to increase access and affordability in higher education, I knew this rate hike on student borrowers was unacceptable. I disagreed with my GOP colleagues who wanted to keep the sky-high rate as a way of reducing the deficit: in effect levying a tax on upward mobility through education.

So I worked with my colleagues on both sides of the aisle to pass a fiscally-responsible compromise that will provide students with an affordable path to a college degree. The permanent new structure beginning this year will tie Stafford Loan interest rates to the market, resulting in undergraduates paying a 3.86 percent interest rate for loans issued for the 2013-14 academic year; almost half of the 6.8 percent rate that they would have paid without Congressional action.

I also fought hard to include provisions in the compromise to protect undergraduates from swings in the marketplace by instituting an interest rate cap, offering a firm ceiling on the maximum interest rate that a student could ever expect to pay on his or her loans. You can read more and see me speaking on the House floor about the reform.

The deal isn't perfect; I would have preferred a lower cap on the variable rate and a formula that would have produced even lower interest rates. But the status quo was unacceptable and the punitive rate hike advocated by some of my GOP colleagues would have been even worse. The essence of effective legislation is compromise, and this reform struck the right balance between controlling spending and protecting our interest in helping students earn a college degree and the many benefits it provides, not only for the student, but for our national economy as a whole.

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