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 on the anticipated vote on a bill to ensure that the interest rate for federal subsidized Stafford loans remains at 3.4 percent. In June, Harkin joined Senators Jack Reed, Kay Hagan, Al Franken, Elizabeth Warren, and Debbie Stabenow to introduce the Keep Student Loans Affordable Act of 2013 (S. 1238), which will secure the low interest rate for an additional year as Congress works on a long-term and sustainable approach for the federal student loan program.
“The interest rate on subsidized Stafford loans doubled from 3.4 percent to 6.8 percent on July 1st. Congress has an imperative to pass a plan to keep rates low now, so that students and families struggling to afford college can count on affordable federal student loans.
“This week, the Senate is expected to vote on a proposal that will maintain the interest rate on subsidized Stafford loans at 3.4 percent for the following year, so that Congress has time to look comprehensively at reforms to the federal student loan program and fully vet any long-term proposal to ensure that it is beneficial for students in the future. As Chairman of the Senate HELP Committee, which will reauthorize the Higher Education Act in the months to come, I will be closely examining any changes to the federal student loan program and the resulting impact on students.
“Students and advocates have told Congress that they would rather have the rates on subsidized Stafford loans double than for Congress to pass a bad proposal that will be worse for students in the years to come. A proposal without an interest rate cap on individual loans--while it may look enticing for the short-term--will leave low- and middle- class students and their families vulnerable to sky-high interest rates, and would remove a protection that has been a part of the federal student loan program since its inception.
“I look forward to voting on our proposal this week and I urge my colleagues on both sides of the aisle to vote in the best interest of students and support this bill.”