Smarter Solutions for Students Act

Floor Speech

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Mr. ROE of Tennessee. I thank the chairman.

I rise in support of the Smarter Solutions for Students Act. Student loan debt, I agree with my colleagues on the other side of the aisle, is a huge issue in this country.

And how did we get to the current rate of 6.8 percent, I asked myself. I went back and reviewed it, and in 2006, the Congress decided that interest rates were too high, so they wanted to lower the interest rates, but found out they couldn't afford the cost of it.

So gradually, stepwise, it went down last year. In 1 year we had a 3.4 percent student loan rate tied to nothing other than the whims of Congress. It created a fiscal cliff for loan rates. So we voted to extend it for 1 year to give us time to have a permanent solution for this.

The permanent solution that we're offering is to simply treat a student loan like any other loan and tie it to a Treasury note plus 2.5 percent for a Stafford loan.

Now, what does that mean?

Certainly, Mr. Speaker, very eloquently, Mr. Miller spoke just a moment ago about how rates can go. Variable means rates can change. That's absolutely true. But rates can also go down. It doesn't necessarily mean that rates will go up. And in acknowledging this, an 8.5 percent cap was put on those loans.

I checked the student loan rate if you went to your local bank or credit union to see what a loan rate would be, and it's about 7 percent now, higher than that.

And I agree with my good friend, Rubén Hinojosa, who believes that we should work for ways to help make college more affordable. I could not agree more.

The Secretary of Education, just this past Wednesday, said he agreed and supported a permanent solution. The President said he supported a market-based approach. This will give certainty to it, and certainly I would urge my colleagues to vote and support this very-needed piece of legislation.

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