Rep. Lois Capps, D-Santa Barbara, voted Thursday against House Resolution 1911, a bill that would increase the cost of college by allowing the interest rates of federal student loans to be determined by the market and vary widely from year to year, like an adjustable rate mortgage.
For example, under this legislation, a loan taken out in a student’s freshman year of college at 4 percent could increase to 7 percent by he or she graduates and repayments start for the loan.
The bill passed by a largely party line vote, 221-198, and is not expected to pass in the Senate.
“A good education has never been more important for getting a good job and securing one’s future,” Capps said. “We should be working to make college more affordable and accessible, not more expensive. What’s more, our students need certainty when they take out loans. Students can’t plan for their future if they don’t know how much they’ll owe when they get out of school. We’ve made great strides in increasing the transparency of college costs, and this legislation would be a step backward.
“I know that keeping interest rates low isn’t a silver bullet to higher education affordability and we need to do more to slow the growth rate of college costs, but it is an important step to containing the skyrocketing debt incurred by our students, especially in the wake of devastating state budget cuts.”
In 2007, the Democratic-led Congress lowered the interest rate on student loans from 6.8 percent to 3.4 percent. But like most pieces of legislation, it was not a permanent change in law and needed to be re-examined in 2012. A one-year extension of the 3.4 percent rate was passed last year. The current 3.4 percent interest rate expires July 1, and if Congress doesn’t act student loan rates will revert back to 6.8 percent.
Capps has co-sponsored the Student Loan Relief Act (H.R. 1595), introduced by Rep. Joe Courtney of Connecticut, that would preserve the rate at 3.4 percent for two years, giving lawmakers time to develop a long-term solution to college affordability.
— Ashley Schapitl is press secretary for Rep. Lois Capps, D-Santa Barbara.