Financial Aid Administrators Urge Lawmakers to Come Together on Student Loan Interest Rate Proposal
WASHINGTON, DC, MAY 23, 2013— The following statement was issued by NASFAA President Justin Draeger:
"NASFAA applauds the U.S. House of Representatives for passing HR 1911 and urges Congress and the Administration to continue to work together to find a permanent, fiscally sustainable solution on federal student loan interest rates. While the House bill is not perfect, it prevents interest rates from doubling on subsidized Stafford loans on July 1; lowers interest rates in the near-term for undergraduate, graduate, and parent borrowers; ties student loan interest rates to a variable market-rate; contains vital caps on future interest rate increases; and retains important consolidation options for students to lock-in favorable rates in the future.
"Most importantly, this bill provides a long-term solution to what has become an unstable and unpredictable problem. NASFAA opposes yet another short-term extension that would do little to help most federal student loan borrowers who have been paying above market rates for several years. Nearly 80 percent of undergraduate borrowers use some combination of low-cost subsidized loans and higher priced unsubsidized loans, mitigating much of the benefit of any continuation of current practice. An extension would also do nothing to help graduate students and parents who are borrowing at nearly 8 percent after a 4 percent off-the-top origination fee.
“If we truly care about making student loans predictable and affordable for borrowers—and sustainable for taxpayers—we cannot keep coming up with stop-gap interest rate fixes every year. Now is the time to implement a long-term student loan interest rate solution that works for all student loan borrowers. We urge Congress and the Obama Administration to move forward and work together to solve this issue now for students and parents.”
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at more than 3,000 colleges, universities, and career schools across the country. Each year, our members help nearly 15 million students receive funding for postsecondary education. In all, NASFAA member institutions served 97% of all federal student aid recipients in the U.S. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit www.nasfaa.org.
Publication Date: 5/23/2013