CU hails Congress’ action on student loans
Friday, June 29, 2012
WASHINGTON, D.C. – Congress today approved a legislative package that would extend the current interest rate cap on subsidized Stafford student loans, as well as fund transportation programs, including a variety of auto safety measures. The House passed the legislation by a vote of 373 to 52, and the Senate approved it 74-19
Consumers Union, the advocacy arm of Consumer Reports, said the legislation contains a number of pro-consumer provisions that would help students and their families, and would make a difference in saving lives on the nation’s roadways.
Suzanne Martindale, staff attorney for Consumers Union said, “Millions of students are struggling to afford college and face the prospect of graduating with a mountain of debt. The last thing they need is for interest rates to double on student loans. This agreement offers some much needed relief to students who are working hard to pay for the education they need to succeed. Senate leaders deserve credit for finding a bipartisan solution to keep these student loan interest rates low.”
Two-thirds of all college students now graduate with student loan debt, compared to just one-third a decade ago. On average, these students graduate with $25,000 in debt. An estimated 7.5 million borrowers would be facing higher interest rates on new subsidized Stafford student loans beginning on July 1 if Congress allowed the rate cap to expire. If interest rates doubled to 6.8 percent, the average student would wind up owing one thousand dollars more in student loan debt over the life of the loan. The existing interest rate cap was enacted through bipartisan legislation approved by Congress in 2007.
In the transportation section of the bill, Congress authorizes several CU-endorsed safety measures:
The bill provides grants for states that pass and enforce anti-distracted driving laws and graduated drivers’ licensing laws for teenagers.
It prioritizes new safety standards for child car seats and new research into emerging child safety concerns
The bill sets new standards to make vehicle recalls more effective, allowing the National Highway Traffic Safety Administration (NHTSA) to require automakers to send additional notifications if NHTSA determines that the consumer response to the initial alerts was inadequate.
Ioana Rusu, regulatory counsel for Consumers Union, said, “There was a long debate over whether to include safety measures in this bill, and we’re really pleased that Congress chose to make safety a priority. These provisions will go a long way to make our roads safer.”
Rusu said, “Too many drivers are paying more attention to their phones than the road, and these measures will definitely help curb distracted driving. We’ve found that one of the best ways to prevent teens from texting behind the wheel is to educate them about the fatal risks, and this bill will help bring that message home.”
Media contacts: David Butler, 202-579-7935 (cell), or Michael McCauley, 415-431-6747, ext 126