Crisis faced with student loansPublished 6:46pm Saturday, June 29, 2013
Congresswoman Terri Sewell
Student Loans are the most recent casuality of the political gridlock in Washington. This week Congress was unable to pass bipartisan legislation to prevent student loan interest rates from doubling for millions of students and middle class families before the July 1 deadline.
Due to this failure to act, interest rates on student loans will rise to 6.8 percent from 3.4 percent this Monday.
Today’s students carry unprecedented debt burdens, more than any generation before. According to the Congressional Budget Office, our government will accrue $51 billion in profit off the backs of our young people this year in student loan interest rates. This profit is greater than the earnings of the nation’s most profitable companies.
Keep in mind, this $51 billion in profit is with the current interest rate of 3.4percent. At $1.1 trillion, student loan debt eclipses all other forms of household debt except that of home mortgages.
Education has been and continues to be the single best avenue into the middle class for individuals across my district. So many low-and middle-income students depend on student loans to make higher education affordable. We cannot afford for partisan politics in Congress to destroy the dream of education by making it unaffordable for so many Americans.
The Joint Economic Committee recently released a report that found that Alabama’s recent college graduates have $25,715 on average in student loan debt. The report found that the debt of these recent Alabama college graduates is on average 66percent of their annual income and 18percent of Alabama student loan borrowers are more than 90 days delinquent.
This past Wednesday I voted to immediately bring up H.R.1595, the Student Loan Relief Act of 2013, introduced by Rep. Joe Courtney.
The bill would freeze the interest rate on student loans at 3.4 percent for the next two years – giving Congress time to enact comprehensive student loan reform as part of a reauthorization of the Higher Education Act.
Earlier in the week I also joined 194 Democratic colleagues in signing a discharge petition to bring the bill to the floor. All of these measures to address this looming crisis have failed on partisan grounds.
I am disappointed that we in Congress have not negotiated a bipartisan solution that would prevent this increase in interest rates. Our inability to reach an agreement by the July 1 deadline will have a major impact on student access to education and our nation’s global competitiveness. It is my sincere hope that Congress will return following the July 4th holiday with a bipartisan comprehensive plan to retroactively reverse this crippling blow to our nation’s students.
We must take responsibility and avoid this looming crisis, so that our country and our students will not suffer the devastating consequences.