Letter to the House on the Bipartisan Student Loan Certainty Act of 2013 (H.R. 1911)
July 29, 2013
On behalf of the more than three million members of the National Education Association, we wish to express our views on the upcoming votes on the Senate-amended Bipartisan Student Loan Certainty Act of 2013 (H.R. 1911), which pegs interest rates on federally subsidized student loans to the 10-year Treasury rate with caps to protect against inflation.
We are encouraged that interest rates on student loans would remain relatively low in the 2013-14 and 2014-15 school years. At the same time, we are very concerned that they would exceed the current rate of 6.8 percent and could ultimately rise to 8.25 percent for undergraduates, 9.5 percent for graduate students, and 10.5 percent for parents of students. We strongly believe that reducing the deficit on the backs of students seeking post-secondary opportunities is the wrong direction to take.
We are pleased that the amended version of H.R. 1911 includes a call for a Government Accountability Office (GAO) study that specifically examines costs associated with the student loan program. Such a study could help inform further discussions of college affordability in conjunction with the long overdue reauthorization of the Higher Education Act. At a time when many are struggling, new student loan rate structure should not leave students and families more vulnerable—even a couple years from now—than they are under current law.
Making post-secondary education more affordable is essential for our nation’s future:
- Some 60 percent of students must borrow to attend college—increasing borrowing costs will make it impossible for some to pursue higher education.
- Adding to the student loan debt burden will not only harm students, it will adversely affect America’s economy—those who face crushing debt cannot buy homes or cars, start businesses, support families, or invest, invent, innovate or otherwise contribute to economic growth.
- Total student debt passed the $1 trillion mark last year—already, 35 percent of our nation’s 37 million students are behind on their loan payments, a number that will only grow if interest rates and the cost of borrowing rise.
We look forward to continuing the dialogue to address concerns about the expected rate increase and its impact on making post-secondary education even more affordable, especially for students from low- and middle-income households. Thank you for considering our views on this critical issue.
Director, Government Relations