With students and their families across the nation craving leadership from our nation's capital, their cries for action have been met with stony silence from Washington. The July 1, 2013 deadline for action expired and in turn statutorily executed a doubling of interest rates for the over seven million students who borrow for college with the subsidized Stafford Student loan program.
At a time when student loan debt exceeds one trillion dollars, when it exceeds credit card and car loan debt, Congressional leaders permitted rates to double to 6.8 percent. This has cost students who borrow the maximum an additional $3,834 in interest payments. For young Americans and their families, who are facing the upcoming school year, this impasse in Washington will tack on thousands of dollars of cost to a post-high-school degree.
We stopped this doubling of rates last year, and we must take action to do so again.
In 2007, a Democratic Congress and a Republican president enacted the College Cost Reduction Act (CCRA) which reduced subsidized Stafford loans from 6.8 percent to 3.4 percent over a five-year period. This law was passed in tandem with the Higher Education Authorization Act, a five-year law that covers the full array of college programs like Pell Grants, Perkins loans, Stafford, loan consolidation and the like. Millions of students saved billions of dollars from those measures, which I helped pass as a member of the Education and Labor Committee.
Last year, as the clock wound down on the 3.4 percent rate, I introduced legislation to extend the lower rate which drew 154 co-sponsors and provided the impetus for final legislation passed to block rates from doubling. This action only delayed the rate hike for one year to July 1, 2013, however.
Over the last several months, I have taken to the House floor and the airwaves to warn about the impending rate hike and have urged bipartisan action to prevent student loan rates from doubling. I introduced a bill, the Student Loan Relief Act, to lock in the current 3.4 percent rate for two years to provide Congress the time it needs to develop a comprehensive, long term solution to this issue as part of an update to the now expired Higher Education Authorization Act. When leaders in the House repeatedly blocked my bill from being considered, I filed a discharge petition to force an immediate vote on the matter -- as of today, it has 196 of the 218 member signatures needed to trigger action.
A sensible, bipartisan and long-term approach must be adopted to deal with student loan interest rates so that students and their families are not subjected to year-to-year uncertainty.
While the time for Congress to act before July 1 has passed, Congress still has time to do the right thing. I will continue to urge my colleagues in both parties and in both chambers of Congress to pass my bill to freeze rates now and keep working on a comprehensive solution. The future of our students and our economy depends on it.