WASHINGTON, DC – Congresswoman Robin Kelly (IL-02) voted today to keep college within reach for Illinois students by voting against the so-called Smarter Solutions for Students Act that would force students into loans with skyrocketing interest rates. According to the Congressional Budget Office, the bill would charge students and their families $3.7 billion in additional interest payments over the next decade.
“Illinois students and their families deserve better than this bill, which makes students pay higher interest payments than they would if Congress did nothing and allowed rates to double,” Rep. Kelly said. “Total student debt currently stands at $1.1 trillion and this bill adds to that burden and will make it more difficult for Illinois students to afford college. We should be opening more avenues to a college education for our young people, not slamming the door shut in their faces.”
Under the Republican bill, interest rates on loans would be reset every year based on 10-year Treasury notes. For example, the interest rate on a loan taken out next year by a freshman may start off low, but he or she doesn’t get to keep that interest rate for the life of the loan. It will change every year, just like predatory adjustable rate mortgages. Congresswoman Kelly believes that raising interest on student loans would be pricing Illinois students out of the American Dream.
Congresswoman Kelly is calling on Congress to move quickly to block student loan rates from doubling on July 1st. She would support a bill that would continue to allow college students to benefit from historically low interest rates by freezing the current low 3.4 percent rate on subsidized Stafford loans for the next two years. Rep. Kelly supports long-term solutions to student loan interest rates as part of the upcoming Higher Education Act’s reauthorization, when policymakers can tackle student loans as part of comprehensive efforts to address student debt, college costs and affordability, and the financial aid system as a whole.