Competing Senate bills on student loans rejected
Thursday, May 24, 2012
Consumers Union urges Congress to find bipartisan solution to fund rate cap that has helped millions of students
WASHINGTON — The U.S. Senate today considered two competing bills to prevent interest rates on subsidized Stafford student loans from doubling to 6.8 percent, but neither received enough votes to pass.
Members of both parties have endorsed an extension of the current cap on student loan interest rates, but they disagree on how to fund the extension.
Consumers Union, the policy and advocacy arm of Consumer Reports, urged lawmakers to work together to find a bipartisan solution.
“Lawmakers need to come together and reach agreement on a fair funding mechanism that keeps the current rate cap in place,” said Pamela Banks, senior policy counsel for Consumers Union. “Congress should invest in our nation’s future by extending the cap and help students afford the education they need to stay competitive in today’s tough economy.”
An estimated 7.5 million borrowers will face higher interest rates on new subsidized Stafford student loans beginning in July if Congress fails to come to an agreement on how to pay for the rate cap extension. If interest rates double to 6.8 percent, the average student will owe thousands more in student loan debt.
The existing interest rate cap was enacted through bipartisan legislation approved by Congress in 2007.