After letting student loan interest rates double last week, Speaker John Boehner and House Republicans had the gall to rally today outside the Capitol this week in support of their plan that would actually increase college costs for students.
Boehner and House Republicans passed a plan earlier this year that would actually pinch students’ wallets even more than their failure to act because “student loan rates could steadily climb and cost students more over the long haul,” under their plan, according to the Associated Press. House Democrats have been demanding an extension of current rates that expired on July 1st.
“It’s bad enough that House Republicans are so dysfunctional that they let student loan rates double, but now they’re just delusional if they think the American people won’t see through their plan to increase student loan interest rates over the long haul,” said Emily Bittner of the Democratic Congressional Campaign Committee. “Speaker Boehner and House Republicans can try to point their fingers at anyone else for student loan interest rates doubling, but they need to look in the mirror if they want to see who’s really to blame. It’s clear that Speaker Boehner and House Republicans are playing political games and standing with corporate special interests instead of supporting college students and middle class families to make college more affordable and accessible.”
AP: House Republican Plan Would Raise Student Loan Interest Rates Up to 8.5 Percent.
“Under the GOP proposal, student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. For instance, students who receive subsidized or unsubsidized Stafford student loans would pay the Treasury rate, plus 2.5 percentage points. Using Congressional Budget Office projections, that would translate to a 5 percent interest rate on Stafford loans in 2014, but the rate would climb to 7.7 percent for loans in 2023. Stafford loan rates would be capped at 8.5 percent, while loans for parents and graduate students would have a 10.5 percent ceiling under the GOP proposal.” Associated Press, 5/16/13
Under the House Republican Plan, Graduates Would Pay Almost $5,000 More in Student Loan Interest.
“In real dollars, the GOP plan would cost students and families heavily, according to the nonpartisan Congressional Research Service. The office used the CBO projections for Treasury notes’ interest rates each year. Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 percent. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000.” If the Republican plan were implemented, college graduates would pay $4,881 more in interest, compared to the current rate. Associated Press, 5/16/13
CBO: Federal Government Turns $51 Billion Profit on Student Loans.
According to the Huffington Post: “The Obama administration is forecast to turn a record $51 billion profit this year from student loan borrowers, a sum greater than the earnings of the nation’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets. Figures made public Tuesday by the Congressional Budget Office show that the nonpartisan agency increased its 2013 fiscal year profit forecast for the Department of Education by 43 percent to $50.6 billion from its February estimate of $35.5 billion.” Huffington Post, 5/14/13