Congress introduces bill to curb Stafford Loan rate hike04/23/13
It’s no secret that paying for college can be tricky business, and many students rely on federal loans and grants to pay tuition.
For the past few years, subsidized Stafford Loans for undergraduate students have been at a low interest rate of 3.4 percent, thanks to the College Cost Reduction and Access Act, which Congress passed in 2007 to lower the rate from 6.8 percent. The rate is set to double July 1 if no action is taken. In that case, any new loans taken out by students would be offered with a 6.8 percent interest rate.
Rep. Jim Matheson, D-Utah, is co-sponsoring a bill to extend the low interest rate for another two years, in hopes to give Congress enough time to come up with a permanent solution.
“I think it’s so important that we provide the best opportunity for students to afford to go to college,” Matheson said in a phone interview.
The rate nearly expired on June 30 2012, but Congress passed a one-year extension in the eleventh hour.
The bill has been introduced to the House and recommended to the educational workforce committee.
Jessica Gail, press secretary for the Congressman, said the bill will help ease tension for students and their families.
“I’d like to do it for even longer than that, because I think that it provides greater certainty. I think it’s just another component of helping solve the challenge of paying for college,” Matheson said. “I know it’s expensive — I know it’s a burden.”
When the interest rate was about to double last year, Congress received a lot of pressure from the public. Representatives came together from both sides of the aisle to pass a temporary solution. At the time, the presidential race was gearing up into full swing and received support from both the president and his Republican opponent, Mitt Romney. That said, the vote went to the House last week and was passed just in time.
Matheson called it a huge bipartisan win and said people are speaking up about the need to have this issue addressed.
“The pressure is starting to build again, as it should,” he said.
It’s early in the process, but Matheson believes all signs point toward the bill going forward and being passed into law.
“It may very well go up close to the expiration date,” he said.
Still, the fact the bill has a hard and fast deadline may work in its favor.
“This is a deadline where something expires, and that often forces action in Congress in my experience,” Matheson said.
Matheson said he is not concerned about the bill getting lost among other issues that are getting attention in Washington such as immigration, gun legislation and the national budget.