Washington, DC – U.S. Senator Ben Cardin, a member of the Senate Finance Committee and a cosponsor of the Keep Student Loans Affordable Act of 2013 (S. 1238), responded quickly to the Senate’s failure to garner sufficient votes to proceed to consider the bill. His full remarks on the Senate floor regarding the increase in student loan interest rates can be viewed here or downloaded here.
“I am deeply disappointed that the some members of the Senate continue to play politics with student loans, putting an affordable higher education for many Americans at risk due to the higher price tag forced upon them by congressional gridlock. I hear many of my colleagues talk about how we don’t want to increase tax burdens on American families. But now we are telling our most vulnerable students and their families that they are going to have to pay more money for their student loans, and by the way, the government is going to make a profit off their education. We have got to stop this now.
“Making college more affordable is just common sense. Saddling young adults with even more debt will not help jumpstart our economy. There’s more debt in student loans than there is in credit cards in America. 60% of the students must borrow money in order to afford a college education. 35% of Americans, 35 million students, are behind in their loan payments. This is an enormous problem. And on July 1, it became a more difficult burden for American students. It makes little sense to add to their already substantial college debt by allowing the interest rate on student loans to double.”
On July 1, the 3.4 percent interest rate on subsidized federal Stafford loans doubled when Congress failed to act on an extension. This rate hike will add about $1,000 of additional debt on the average student over the life of the loan. If enacted, the Keep Student Loans Affordable Act of 2013 would retroactively set the interest rate for any subsidized Stafford loan made between July 1, 2013 and June 30, 2014 at 3.4 percent. The bill is fully paid for by closing a loophole that currently allows those who inherit certain IRAs and 401(k)s to avoid paying the taxes on those accounts for many years. The bill does not create a new tax; it would simply cap the amount of time payment of taxes can be delayed at five years.