From the Office of U.S. Sen. Barbara Mikulski:
Senator fights to protect 105,000 Maryland students from federal loan rate doubling
Republicans continue opposition which led to automatic doubling of loan rates on July 1, an average increase of $1,000 on new loans
WASHINGTON – U.S. Senator Barbara A. Mikulski (D-Md.) today voted to support the Keep Student Loans Affordable Act of 2013 to roll back the doubling of federal student loans for more than 105,000 Maryland students. Senate Republicans voted against proposals to prevent federal Stafford student loans from doubling from 3.4 percent to 6.8 percent on July 1, which led to an average increase of $1,000 for more than seven million undergraduate students nationwide taking out new loans. Today, Senate Republicans filibustered the bill by a vote of 51 to 49 to prevent Congress from moving ahead with the legislation.
“Higher education should be part of the American dream, not a financial nightmare. By filibustering this common-sense legislation, Senate Republicans have continued to block access to the opportunity ladder for our future middle class,” Senator Mikulski said. “In order for America to out-build and out-innovate the rest of the world, we first must out-educate – which means we have to make investments in federal grants and student loans. The bill that Senate Republicans blocked today would give our young people access to the freedom to achieve, to be able to follow their talents and to be able to achieve higher education in whatever field they will be able to serve this country. I will continue to fight for a long-term solution to protect students, middle class families and our future workforce from devastatingly high interest rates.”
Senator Mikulski cosponsored the legislation introduced by Senator Jack Reed (D-R.I.) to prevent the rate hike for one year. The bill would keep interest rates on federal Stafford student loans from doubling from 3.4 percent to 6.8 percent, an increase of $1,000, for more than seven million undergraduate students. As the cost of a college education continues to rise, this bill helps middle class families that struggle to afford college. The ballooning student debt rate is creating a drag on the U.S. economy. As student loan debt has risen, home ownership and car ownership have declined for young households. Keeping the cost of borrowing low will help reduce the amount students owe and help give them purchasing power that can improve our overall economy.
The rising tide of total student debt, which has crested above $1 trillion for the first time in our nation’s history, has passed credit cards and auto loans to become the second-largest type of consumer debt behind mortgages. Research by FICO Labs found that in 2005 the average student loan debt was just over $17,000. In 2012 it rose above $27,250 – a 58 percent increase in just seven years.
Senator Mikulski has also announced her support for the Student Loan Affordability Act of 2013 and the Bank on Student Loans Fairness Act, which would lower need-based student loan interest rates to slow the rapid accumulation of student-loan debt.
Senator Mikulski’s statement submitted to the Congressional Record follows:
“I am proud to rise today to support the Keep Student Loans Affordable Act. This bill would extend the current interest rate of 3.4 percent for subsidized Stafford Loans for the next school year. This interest rate reflects a record-low for interest rates on federal student loans, and these loans can only go to students and families that demonstrate a need for them; 60 percent of dependent subsidized loan borrowers come from families with incomes of less than $60,000. Subsidized Stafford loans help more than seven million college students without worrying that the interest on their loans will begin accruing while they’re in school. It helps more than 105,000 students in Maryland. Middle class families are feeling stretched and stressed and if we fail to act, students could be facing an additional $1,000 in debt over the life of their loans.
“I would also like to announce my support for the Bank on Student Loans Fairness Act, introduced by Senator Elizabeth Warren. This legislation would lower the current interest rate of 3.4 percent to 0.75 percent for subsidized Stafford Loans for the next school year, which is the same interest rate that banks pay. Banks have arbitrarily raised interest rates on consumers, and applied higher interest rates retroactively. They charged fees without any legitimate purpose – and then charged interest on top those unfair fees. And they marketed their products to college students who they knew couldn’t afford the credit they were providing.
“The banks are not looking out for the best interest of students; they’re looking after themselves to make a profit. The federal government has worked hard to keep student loan interest rates as low as possible to ensure that access to higher education remains a viable option for students and their families. That’s why it’s important that we work together to keep the interest of students at heart and not create additional burdens on them. So why not let students pay the same interest rates as banks?
“I’ve said this often, but we in this country enjoy many freedoms: the freedom of speech, the freedom of the press, the freedom of religion. But there’s an implicit freedom our constitution doesn’t lay out in writing, but its promise has excited the passions, hopes, and dreams of people in this country since its founding. The freedom to take whatever talents God has given you, to fill whatever passion is in your heart, to learn so you can earn and make a contribution – the freedom to achieve.
“When I was a young girl at a Catholic all-girls school, my Mom and Dad made it clear they wanted me to go to college. But, right around graduation, my family was going through a rough time because my Dad’s grocery store had suffered a terrible fire. I offered to put off college and work at the grocery store until the business got back on its feet. My Dad said, ‘Barb, you have to go. Your mother and I will find a way, because no matter what happens to you, no one can ever take that degree away from you. The best way I can protect you is to make sure you can earn a living all of your life.’ My father gave me the freedom to achieve. And this legislation will give millions of Americans that same freedom without adding a dime to the deficit.
“Students will bless us if we’re successful in keeping their student loan interest rates as low as possible. Getting a college education is the core of the American dream and I am going to be sure that every student has access to that dream and make sure that when they graduate their first mortgage isn’t their student debt. Senator Reed’s legislation should be passed in a swift, expeditious, uncluttered way. It gives our students access to the American dream. It gives our young people access to the freedom to achieve, to be able to follow their talents, and to be able to achieve higher education in whatever field they will be able to serve this country.
“While our work isn’t done when it comes to ensuring access to affordable higher education, this bill helps us get there. While these bills will fix the problem today, I will continue to work with my colleagues to figure out a longer-term solution.”
So the government is already covering the interest as long as you’re still in school. You don’t have to pay it back until after graduation. How long are these loan held over? If it’s over 4 years (arbitrarily) that $1,000 is a whopping $21 per month. That’s probably half of what one night in that bar next to campus costs.
There are plenty of incredibly successful people who didn’t have that formal education. Even more now than in the past. You choose to incur the debt and know the terms of it before you do.
Work harder and pay it off, no matter what the interest rate is. You’ll appreciate your education more and hopefully learn that not everything is going to be handed to you. It worked for me.
Justin A. Glimmer says
Doh…..typical right wing rhetoric. Lower student loan rates beats the hell out of all the corporate welfare provided by the re-bubba-cans in congress. But then again…..students (and recent graduates) can’t afford to donate millions to those same politicians campaigns like those multi-million dollar CEO’s can. Add it up M.F. !
So you seem to have forgotten who took the majority of those millions in donations, your beloved “O”. Of course, that’s if you ever recognized that fact before. If you did, I’m sure it was “Justin A. Glimmer”. Besides, there are far more who owe on these loans than there are multi-million dollar CEO’s. I guess they can’t afford the political donations either?
As you suggested, “Add it up M. F.”
“Work harder and pay it off,”
If you honestly think it’s that easy then you should probably pick up a newspaper and have a look at the Help Wanted section. At the moment a student out of college with a Bachelor’s is lucky to get an entry level job if even called for an interview. Unemployment is high, and most employers now require a degree for even the most basic, high school education-equivalent positions. And if you think it is as easy as walking into Taco Bell or the local mall and filling out an application I worry for you. If minimum wage is not enough to pay one month of rent in Maryland, how in the world are these students going to make loan payments? Get a 2nd job?? I guess I have forgotten that once you have one job it is incredibly easy to pick up a 2nd, or a 3rd. In fact, I’m going to run down to the jobs store and pick one out right now! It’s just that easy! Just work harder and get more jobs, dummies!
Really? I’m astounded at the number of places that are hiring, yet can’t find the applicants.
II chose to work 60+ hours at near minimum wage, to meet the expenses I chose to incur as well as my student loans, until I found a job related to my degree. I wasn’t entitled to a job just by getting a degree. I had to work for it and had to work jobs that were not exactly what I wanted until I was able to get something more desirable. That’s the way it is (unless you’re entitled to everything).
By the way… The Jobs Store closed yesterday. They couldn’t afford to support the entitled anymore. Sorry.
Don’t become a teacher in Harford County because you won’t get any step increases while you are paying off those loans for the rest of your life. Seriously, I have loans, my kids all have loans; it would be nice if they could afford to live a little bit after college. And my children have all worked while in college. It’s tough to afford an education for most of “middle class” America. Let’s not make it harder. Thank you, Barbara Mikulski!
Matthew Butler says
That is far easier said than done. As a millennial, I come from a generation that has had to pay the highest student loan rates along with tuition in the history of this nation ( excluding the changes in 2007). With the unemployment as high as it has been since the fiscal crisis of 92, I highly doubt you ” go and work more and harder” people lack the action and the insight to understand the the actual hardships that face us. You just want to see people burn and nothing more. Not one person wants to hold the schools accountable either and that will cause problems far beyond what we see today.
If you really want to blame students for trying to become something in their lives, then I invite you to reflect on what burdens you thought you would not have when you had children.
And not of you even know what being a conservative is.
Here is an example of a conservative response in the Potus: Cut all federal funding to all institutions, period. The government and the civilian population has worked long enough to cooperate with the universities. It is time we start laying off the schools. Those who want federal funding have to answer to what taxpayers want. The Universities deserve nothing. All funding is given to them by the grace and faith of the american people. When they spit on us, why reward the behavior?
Students are not the problem, The schools need to be held accountable and not one American can ever entertain that notion as true. ALL of you are delusional for one of two reasons: a) you have some sort of other gripe you re trying to flex with this issue b) you know it, but you are unmotivated and do not posses the resolve to do anything about it. I was in both those categories.
Tell your state representatives that UMBC, UMCP, Towson and the MHEC need to be punished and keep inquiring on how that may be achieved.
Just Go away already babs. says
Dont worry, Illegal aliens will still get their in state tuition. I would love to see the fiscal burden illegal immigration costs the state of MD vs the budget deficit. Willing to bet the numbers are close.
Ha. So now illegal immigrants are going to steal your education as well as your job? Somehow I don’t think you will need to worry about that.
It’s alright in the end. They have more ambition than the average white person and far less a sense of entitlement.
It’s nice to vote for an interest rate repeal. Maybe Senator Mikulski should have voted NOT to federalize the entire student loan program! Especially under the guise of healthcare…..
The feds should incentivize STEM and other needed (doctors, nurses, etc) degrees, underwater basketweaving is not needed, and students should have to think long and hard about pursuing such a degree vs one with a higher earning potential.
Why lower the rates? No one pays the loans back anyhow. Maybe if the schools stopped spending millions on party’s ( Balto. City), huge new stadiums ( HCCC and Towson), close non performing colleges ( Coppin) and stop giving free education to illegals the deserving kids could afford an education.
Maybe that approach works in your profession, but in mine, you would lose my professional license if you did not pay your loans on schedule.
Oops, your, not my.
Yum Yum says
Say what? Who isn’t paying their loans back? I have been paying mine for 9 years! Almost done…
About 120 billion of student loans are in default (not just delinquent, but so far outstanding that they have the limit of zero percent chance of being repaid). As a percentage of volume that’s about 11%; give it time and it’ll become far worse as tuition continues to outpace inflation (and not the stupid CPI inflation either).
The facts are, tuition is too expensive, it’s a bubble, and we should stop subsidizing it. If it were cheaper, those bar-back, bartender, taco bell, insert whatever menial temp job here, would allow these kids to work through school, learn what they don’t want to do, study harder, get degrees at 1/3rd the cost and a hell of a lot less debt.
Fiscal Pro says
It’s evident that we no longer teach fundamental economics in high school and we are graduating idiots. Here’s the deal MO-rons… The simple act of “guaranteeing” these student loans is the root of the problem. You cannot default on these loans. Uncle Sam will get his money no matter what. Try not paying. All risk is removed from loaning this money. What does this do??? It drives tuition up – through the roof. Schools will gladly accept your money when it’s backed by the full faith and credit of your government. And since you will jump on the chance of going to school with loaned money, demand for the degree goes up and so does the price. Whether the rate is 3% or 6%, the impact over the life of the loan is negligible. This whole rate argument is a red herring. For you low information voters out there, that means a logical fallacy. A misleading piece of fiction that leads you sheep to a false conclusion. If you want tuition prices to go down, get rid of government loans.
Moot topic. When all of the money our fearless leader is currently printing, gets out into circulation, interest rates are going to skyrocket.
You get plentiful choices to select a stairlift in accordance with
your need and budget.
The firm produces over 50, 000 stairlifts per annum and provides them to tens of
thousands of families all over the world.