WASHINGTON, D.C.—U.S. Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, released the following statement today after the U.S. House of Representatives approved legislation that would make college more expensive for millions of American students. In an effort to protect taxpayers and shield college students from a sharp increase in federal Stafford loan interest rates, Harkin, along with Senator Jack Reed (D-RI) and Majority Leader Harry Reid (D-NV), have introduced a fully paid-for bill to ensure student loan interest rates for more than 7 million undergraduate students do not dramatically increase this year.
“If Congress does not act within the next five weeks, the interest rate on subsidized Stafford loans is set to double from 3.4% to 6.8% on more than 7.2 million students. Last year, we worked hard to keep rates low and saved the average student over $1,000 on each loan. But instead of preventing rates from doubling this year, the House bill charges students $3.7 billion in interest to pay for deficit reduction. I am dismayed by this action. We are focused on making college more affordable—while they seem focused on making it more expensive. The bill they passed today fails the first test of any policy: do no harm. It’s worse for students than if the rate doubles.
“The Student Loan Affordability Act, which I have introduced with Senator Jack Reed and Majority Leader Harry Reid, is a responsible, fully-paid-for solution to keep student loan rates affordable. This two-year extension is the most viable way forward to ensure that college remains within reach for students who rely on federal loans to pay for their education and will allow us to develop an interest rate policy in a careful and thoughtful way within the context of the reauthorization of the Higher Education Act.
“With time running out before the July 1st deadline, the House is using this urgency to put forward a short-sighted long-term policy that attempts to balance the budget on the backs of college students. That is not the answer. With new college graduates facing a tough job market, I believe we must work to maintain, not increase, student loan interest rates and preserve our historical commitment to protecting students from outrageous interest rates now and in the future. I will be working with my colleagues in the Senate to advance our bill and help college remain within reach for all Americans, regardless of their financial situation or background.”