May 10, 2013
House Bill Doesn’t Stop Student Loan Interest Rates from Doubling
Kline/Foxx Bill Shifts the Government’s Debt to Students, Makes College Less Affordable
Joint Statement of the Institute for College Access & Success and the Education Trust
Under a new House bill, interest rates on certain federal student loans will nearly double by 2016 and more than double by 2017, not just on new loans but on all loans issued this coming school year or after. Legislation introduced by House Education and the Workforce Chairman John Kline and Subcommittee on Higher Education and Workforce Training Chairwoman Virginia Foxx has many of the right goals--to stop the scheduled doubling of interest rates on subsidized Stafford loans, to get away from annual fights about interest rates, and to maintain the long-standing policy of capping federal student loan interest rates. Despite these important goals, the details of the legislation are seriously flawed. If passed, it will lead to higher rates on all types of federal student and parent loans than if Congress did nothing at all.