House to Vote Tomorrow on Bill that Would Make Student Loans More Expensive
The House of Representatives is scheduled to vote tomorrow, May 23, on House Resolution 1911. Under the bill, sponsored by U.S. Reps. John Kline and Virginia Foxx, new federal student loans would have variable interest rates set using the following formula:
- Stafford loans (subsidized and unsubsidized): 10-year Treasury Note plus 2.5 percent, capped at 8.5 percent.
- PLUS loans (graduate and parent): 10-year Treasury Note plus 4.5 percent, capped at 10.5 percent.
Students and families would end up paying even more for student loans than they do now. The Institute for College Access & Success (TICAS), the parent organization of The Project on Student Debt and friend of student loan borrowers, projects that by the time this fall's freshmen class graduates from college and begins to make their first loan payment, the rate would have risen to 7.4 percent. In fact, for students who graduate in four years and borrow the maximum amount ($27,000), H.R. 1911 would actually cost them more than if rates were allowed to double on July 1.
