Washington, D.C. – Congressman Dave Loebsack released the following statement today after the House passed compromise legislation that would bring down the interest rates for new student loans. Due to inaction of House leadership, interest rates for new student loans doubled on July 1st, from 3.4 to 6.8 percent. This legislation will tie the interest rate of the loan to market rates, but is capped at 8.25 percent. As a result, this year undergraduates who borrow for college will save nearly $1,500 in interest over the life of the loan. The legislation has already cleared the Senate and is expected to be signed into law.
“I could not have gone to college without the availability of student loans and other financial assistance programs, so I am pleased Democrats and Republicans finally came together to pass this legislation. It is shameful that students were caught in the middle of this political posturing in the first place. Neither side got exactly what they wanted, nor is it the deal that I would have authored, but it demonstrates that compromise can actually happen when people sit down and work through their differences. I continue to have concerns that in the long run this bill may allow rates to rise above the current 6.8 percent cap, and look forward to addressing this issue and the rising cost of college as work begins on reauthorization of the Higher Education Act.”