Congressman Eliot Engel (D-NY-16) slammed House GOP Leadership for failing to work with Democrats in the House and Senate on a bipartisan solution to prevent a scheduled doubling of the interest rate on subsidized Stafford student loans.  As a result, the deadline will pass on July 1 further indebting students and their families. 

Rep. Engel joined Democratic colleagues in submitting a bill to freeze the interest rate on these loans at 3.4% for the two years – giving Congress time to enact comprehensive student loan reform as part of a reauthorization of the Higher Education Act.  The legislation was ignored by Republican leadership.

“College students and their parents need help to afford the rising costs of a college education.  Having interest rates double will force families into decades of debt or having their children skip college.  It is yet another sad story of the Republican House leadership bowing to its most radical members rather than govern responsibly and seeking a compromise with Democrats.  The only people who suffer from such a governing policy – or lack of a governing policy – are the American people,” said Rep. Engel. 

On May 23, House Republicans passed a student loan bill which would force even higher interest payments by students and families.  According to the non-partisan Congressional Research Service, under the Republican bill, students who borrow the maximum amount of subsidized and unsubsidized Stafford loans over five years would pay $2,000 more in interest costs than if interest rates only doubled. 

Total student debt currently stands at $1.1 trillion, greater than credit card debt.  Instead of reducing student debt, the GOP bill would actually increase it.  “This double whammy of increased rate and existing debt is unacceptable and must be avoided.  College must remain affordable if we are to thrive as a nation,” said Rep. Engel, a senior member of the House Energy and Commerce Committee.