Rate spike a hard lesson on loans
As unfortunately happens in Washington, facts are often sacrificed as politics prevails. With regard to the debate on student loans, there are three facts people need to know: 1) Congress has until the end of June to prevent an interest rate spike; 2) the House of Representatives passed legislation last month to prevent this spike and provide lower rates to a majority of recipients and; 3) the Senate has failed to pass any legislation that would prevent the rate spike. We are now calling on the Senate to act to help us protect students.
I am the youngest of 12 children. My parents were not in a position to pay for my education and I know full-well the significance of taking out loans. Even today, as I continue to make monthly student loan payments, I think about my children who will head off to college someday soon (too soon!). We can reduce the loan burden on future students with help from the Senate.
Over the past year, we have heard from countless concerned students and parents on this issue. We hosted college financial aid officers last summer, met with students at Cornell University recently to discuss their loans and solicited feedback from college presidents and financial aid officers on the House bill. Their collective concern is an immediate one: prevent the looming rate spike.
On Monday, student loan interest rates will double on millions of students across the country unless Congress acts to prevent the mandated increase. You may remember this same debate capturing the country’s attention this time last year. Congress avoided that student loan interest rate increase, but only by putting in place a one-year patch.
Last month the House of Representatives passed the bipartisan Smarter Solutions for Students Act to lower student loan interest rates and avoid the July 1 student loan cliff. Area schools say under current law, our bill will lower interest rates on more than 70 percent of loans their students receive. That is a huge advantage for students and we stand with them, defending the opportunity to advance their education.
The House bill also eliminates the annual waiting game by getting politicians out of the business of setting interest rates by moving to a market-based rate – a policy President Obama included in his 2014 Budget. I do not believe it is fair to tie our students to partisan debate year after year.
While we are pleased to have passed a measure in the House to take care of our students, the Senate has yet to pass anything. Kicking the can down the road yet again on this issue is not an option. It is not fair to put millions of students in a position where creditors are taking more from them because of the Senate’s inaction.
Two proposals, both a Democrat and a Republican proposal, failed in the Senate. We have less than two weeks and yet the Senate is seemingly unconcerned about the consequences as it sits idly by, watching more money being taken from students. I truly hope the Senate’s lack of solution is not a sign it will move on without a fix. I hope the Senate does not ignore its responsibility to alleviate the burden on students.
In response to the Senate’s lack of action, I led a bipartisan letter with 50 members of Congress signing to press Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell to act. The letter gained support from all of the Democrats who voted in favor of the House-passed bill. We are calling on the Senate to immediately bring legislation to the Senate floor so that we can work together to resolve any differences and prevent the July 1st rate spike. We stand ready to work with our Senate colleagues on both sides of the aisle to get a proposal across the finish line.
The clock is ticking. Students can’t wait on Congress much longer and they shouldn’t have to. It isn’t fair to hold them hostage in this debate. Since we all agree student loan rates should not go up, let’s show students we care by passing policy before the end of the month. With cooperation from the Senate, we believe there is a path for the House and Senate to approve a bipartisan, long-term solution.
Tom Reed is a U.S. representative in Congress whose district includes Chautauqua County.