WASHINGTON, D.C. – U.S. Representative Martha Roby (R-AL) today called on Senate leaders to rise above politics and pass legislation to address student loan interest rates.
On Wednesday, Senate leaders continued to block a long-term, market-based plan to get Washington politics out of setting student loan interest rates for good. House Republicans passed such a plan in May, The Smarter Solutions Act, which seeks to move away from a system that allows Washington politicians to use student loan interest rates as bargaining chips, creating uncertainty and confusion for borrowers.
Meanwhile, because the Senate failed to act before the July 1 deadline, the interest rate on new Stafford Loans have already doubled from 3.4 to 6.8 percent. Rep. Roby said with rates already doubled the time for political bickering is over.
“We’ve known for more than a year that we needed to deal with the student loan issue,” Rep. Roby said. “That’s why the House acted earlier this year to pass a long-term solution to the student loan problem that gets Washington out of the business of setting rates. Now, almost a week since the deadline has passed, Senate Democrats are still stammering aimlessly around the issue while American students are trying to figure out how to pay for college.
“The student loan issue is just one part of the larger problem of college affordability. The Smarter Solutions Act is an important first step toward breaking the government of some bad habits it has developed on student loans, habits which even the White House agrees we need to stop. Simply slapping a one-year band-aid on this issue does nothing to remedy the systemic problem and sends the wrong message to young borrowers.
“This doesn’t have to be a partisan issue. In fact, even the White House has supported reform that ties student loan rates to the ten-year Treasury note. It’s time for Senate leaders to rise above political stubbornness and pass a real solution on student loan rates.”
Today, the Washington Post editorial board called the Senate’s efforts to kick the can down the road a “pathetic non-solution" and "dead-end policy." Also, the Wall Street Journal criticized Senate Democrats for failing to reform "a policy disaster that results in rising costs, taxpayer losses and overstrapped borrowers.”
Detailed information about The Smarter Solutions Act can be found on the House Committee on Education and the Workforce website at http://edworkforce.house.gov/smartersolutions/.