Update: Student Loan Rates Remain High Amidst Finger Pointing

By Steve Sadin

The rates doubled because a one-year extension keeping them at 3.4 percent expired Monday. The House of Representatives did pass legislation in May which is awaiting Senate action. Reps. Brad Schneider (D-Deerfield), Jan Schakowsky (D-Evanston) and Tammy Duckworth (D-Hoffman Estates) opposed that bill and have come under criticism for their action.

“It is very troubling that these three politicians would use the student loan debate for political gain while Illinois college students are suffering,” National Republican Congressional Committee spokesperson Katie Prill said. “When given the chance to vote for a common-sense proposal (they) voted no.”

Schakowsky and Schneider opposed the bill because in their opinion it could potentially bring rates higher than 6.8 percent and raise them to as much as 8 percent. The legislation passed in the House would allow rates to vary over the life of the loan creating uncertainty.

“For far too many, college is increasingly out of reach, and this legislation would make it even more expensive for already struggling families to pay for college,” Schneider said. “That’s why I’ve cosponsored legislation (the Student Loan Relief Act) that keeps rates on student loans at their current level.”

Duckworth and Schakowsky are also cosponsors of the legislation Schneider favors. It is the kind of law Schakowsky believes will help put more people in a position to gain employment and a ticket to the middle class.

“I believe we should be doing everything in our power to make college more affordable for our students and allow them to pursue their dreams,” Schakowsky said. “In the meantime, I’m fighting to lower rates by passing the Student Loan Relief Act and the Student Loan Fairness Act.”

Original story - June 28:

Interest rates on new federally subsidized student loans will double from 3.4 to 6.8 percent Monday unless Congress takes action to continue the one-year extension it passed in 2012, according to a spokesperson for Rep. Brad Schneider (D-Deerfield).

Schneider, Rep. Jan Schakowsky (D-Evanston) and Rep. Tammy Duckworth (D-Hoffman Estates) have signed a discharge petition in an effort to force the House of Representatives to vote on the measure before Monday.

Without action, students will take on an additional $3.7 billion in debt over the next ten years, according to Schakowsky.  She sees a negative impact on economic growth and job creation as well as helping people join the middle class.

“Millions of students rely on student loans to make a college education affordable and they can't afford the burden of increased interest costs,” Schakowsky said. “Well-educated students are productive workers, grow the middle class and help expand our economy. Our students need access to more affordable student loans rather than increased student loan interest rates.”

Schneider, who has already introduced the America Work Act to enhance education directed at job training, feels more expensive loans will retard the ability of young people to become more skilled members of the workforce.

“For far too many, college is increasingly becoming a dream beyond their reach,” Schneider said. “We need to work together to make higher education more affordable and accessible because only by enhancing our nation’s education opportunities will we maintain the best educated, most innovative and most productive workforce in the world.”

For Duckworth, affordable student loans are the ticket for people to reach the middle class. Without them, she sees fewer opportunities for the children of working class parents to attend college.

“We cannot allow talented young Americans to have their dreams thwarted because we have lost sight of our priorities,” Duckworth said. “We need to bring forth a common sense proposal and act now to prevent student loan interest rates from doubling on July 1.”