[Congressional Record Volume 159, Number 92 (Tuesday, June 25, 2013)]
[House]
[Pages H3998-H3999]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      STUDENT LOAN INTEREST RATES

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Connecticut (Mr. Courtney) for 5 minutes.
  Mr. COURTNEY. Mr. Speaker, in 5 days, unless Congress acts, the 
Stafford student loan program, which helps 7.5 million students pay for 
college, is set to see its interest rates increase from 3.4 percent to 
6.8 percent. Again, this is at a time when student loan debt now 
exceeds $1 trillion. It's the highest form of consumer debt in the 
economy. It exceeds credit card debt and car loan debt. And yet, 
despite the fact that, again, students and families are facing this 
mounting, crushing burden, unless we move in a very short period of 
time, we are going to add to that burden by allowing the interest rates 
to go from 3.4 percent to 6.8 percent.
  Six years ago, this Congress acted to pass the College Cost Reduction 
Act, which cut that rate from 6.8 percent to 3.4 percent. It was a 5-
year bill tied to the Higher Education Reauthorization Act. Last year, 
with minutes to spare, we extended that lower rate for 1 additional 
year. Again, here we are today, 5 days away from this rate doubling.
  I've introduced legislation, H.R. 1595, the Student Loan Protection 
Act, and 196 Members of the House signed a discharge petition demanding 
that the Speaker of the House bring this bill up for debate and 
passage, which will protect that lower rate for an additional 2 years. 
We need that time so that we can pass a new Higher Education 
Authorization Act, which will deal with the broad range of issues that 
surround how we pay for college and access to higher education, which 
includes the Stafford student loan program, the workhorse for families 
to pay for college. It deals with Pell Grants and Perkins loans. It 
also deals with the obstructions and hurdles that people face when they 
want to refinance student loan debt after they have left college. 
Again, that's a big part of that $1 trillion debt burden that's out 
there in society.
  We need a broad, long-range plan to pay for higher education because 
the stakes are huge. We know that the U.S. economy needs critical 
skills in our workforce if we are going to continue and grow and 
prosper. The baby boomers are now hitting retirement age at increasing 
numbers, and in a whole range of critical occupations, from medicine to 
science to engineering, we need to refill the ranks. And higher 
education is the avenue that we can continue to succeed as a country 
and as a nation. Our competitors know this. They are investing in 
higher education at a much higher rate than we are in the U.S. We must 
act to make sure that, again, we don't go backwards on July 1.
  The House passed a bill on May 23. The Republican majority pushed a 
bill through which they claim solves the problem. It changes the fixed 
rate loan program to an adjustable rate tied to 10-year Treasury notes, 
which is roughly now at about 2.6 percent. It adds an additional 2.5 
percent to that. They claimed when they passed that bill that that 
solves the problem. Unfortunately, the Congressional Budget Office 
drilled down deeper and analyzed what the real net impact would be on 
students. The problem with that variable rate program is that for a 
freshman entering this fall, like my daughter, who doesn't use the 
Stafford loan program, if some of her fellow students sign up for the 
Stafford loan program, under the Republican bill they really don't know 
what the rate is because it will reset over the 4 years that freshman 
is in college. Looking at where Treasury notes are projected over the 
next 4 years, the Congressional Budget Office has told us that, in 
fact, for that graduating student, 4 years from now the interest rate 
on the loan that they will graduate with will be over 7 percent.
  So, in other words, as CBO told us, if we allow the Republican bill 
to go forward, it's actually worse than doing nothing and allowing the 
rates to double to 6.8 percent. President Obama has proposed a 
different version, which would, again, use the cheap cost of money 
today with an inflation add-on. But that plan that the President put 
forward locks in the rate for the student who takes that loan out next 
year. So, in other words, that freshman who signs up for a Stafford 
student loan that will go to school with my daughter next year, their 
rate will not reset from one year to the next. They will have at least 
the protection of a fixed rate based on the calculation using the 
Treasury note baseline. It is

[[Page H3999]]

a better proposal. The Republican bill has a cap in terms of how high 
these rates can go over time. The President's does not.
  We need, obviously, to get both sides to come together and come up 
with a real compromise which comes up with an affordable, sustainable 
way for the Stafford student loan program to work. With only 5 days to 
go, I would argue that the better course now is just protect the lower 
rate, give us some time to come up with, again, overlapping good ideas 
from both sides of the aisle to fix this problem.
  Let's not let the rates double. Let's pass H.R. 1595. Let's help 7.5 
million college students pursue their goals and dreams and help the 
U.S. economy.

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