House Democrats Introduce (Unfunded) Bill to Prevent Interest Rate Hike
Rep. Joe Courtney (D-CT) introduced legislation (H.R. 3826) this week to keep subsidized Stafford loan interest rates at 3.4 percent indefinitely. The bill was filed on Wednesday, the day after President Obama called on Congress to prevent student loan interest rates from doubling on July 1, 2012 in his State of the Union address.
The bill currently faces a doubtful future as there are no proposed offsets to maintain the 3.4 percent interest rate, nor are there any Republican supporters. The bill has nine Democrat cosponsors.
Some estimate that keeping the interest rate at 3.4 percent could cost as much as $5 billion a year, according to Inside Higher Ed. The additional cost is one reason Republicans have expressed opposition to the proposal.
In a press release, House Education and the Workforce Committee Chairman John Kline (R-MN) notes that Congress "must either allow interest rates to rise on student loans, or stick taxpayers with another multi-billion dollar bill."
"Real solutions are needed to address the problem of rising college costs, not more short-term band-aids," the press release states.
The press release doesn't offer concrete proposals but encourages exploring ways to make college affordable, increasing transparency in the reporting of college costs, and working to remove burdensome federal regulations that could impose higher costs on postsecondary institutions.
Obama's proposal to keep interest rates at 3.4 percent is one of several the administration has put forward to make college and student loans more affordable.
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