The looming student loan disaster

Thankfully somebody is working on this:

There's a little over two weeks before the interest on these loans will double. House Republicans could easily stop this if they wanted to, because the fix is about as simple as they come:

To amend the Higher Education Act of 1965 to extend the reduced
interest rate for Federal Direct Stafford Loans.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Student Loan Relief Act of 2013''.

SEC. 2. INTEREST RATE EXTENSION.

Subparagraph (D) of section 455(b)(7) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(b)(7)) is amended--
(1) in the matter preceding clause (i), by striking
``2013'' and inserting ``2015''; and
(2) in clause (v), by striking ``2013'' and inserting
``2015''.

That's it. It's no omnibus that requires staff to analyze and put forward desired changes, and there's no politically-motivated riders to sour the bill. But it's still parked in Committee. A Committee that Virginia Foxx (for some strange reason) wields considerable influence on. Here's her solution to the problem:

The Smarter Solutions for Students Act:
Calculates subsidized and unsubsidized Stafford loans using a formula based on the 10-year Treasury Note plus 2.5 percent.
Calculates graduate and parent PLUS loans using a formula based on the 10-year Treasury Note plus 4.5 percent.
Resets student loan interest rates once a year, allowing rates to move with the free market and ensuring borrowers can take advantage of lower interest rates when available.
Protects borrowers in high interest rate environments by including a 8.5 percent cap on Stafford Loan interest rates and a 10.5 percent cap on PLUS loans.
Provides stability for low- and middle-income students working to finance their postsecondary education, and prevents future uncertainty about whether Congress is going to act in time to change the interest rate.

Yeah, that's how you stop the interest rate from moving up to 6.8%, by putting an 8.5% cap on them. Idiot.

Comments

The effort continues:

WASHINGTON, DC — With Congress facing just fewer than 10 legislative days to act before a looming increase on student loan interest rates hits more than 7 million students and families, U.S. Rep. George Miller (D-Calif.) joined his Democratic colleagues today, led by U.S. Rep. Joe Courtney (D-Conn.), in an effort to force a vote in the House to provide student debt relief to millions of student loan borrowers.

“Across the country today, rapidly-accumulating student loan debt threatens not just individual families but the underpinnings of our economic recovery,” said Congressman Courtney. “Rather than confronting the problem head-on, House Republicans offered a bill the Hartford Courant calls ‘Orwellian’ for claiming to help students, but, in fact, making the situation worse. We now have just 17 days to prevent this senseless rate increase. We owe it to our young people and the next generation of workers to get the job done.”

Democrats filed a discharge petition on H.R. 1595, a procedural motion that frees up a bill that has been blocked in a congressional committee. Last month, House Republicans pushed through legislation to make college more expensive for students and families, forcing them into loans with skyrocketing interest rates that fluctuate year by year, further compounding the student debt crisis. The discharge petition would require a straightforward, up-or-down vote the bill authored by Rep. Courtney to extend current low interest rates on subsidized Stafford student loans for two years and allow Congress time to consider long-term, comprehensive solutions, to address both rising college costs and affordability, during the reauthorization of the Higher Education Act. At every corner, Republicans have blocked consideration of any bill that would provide student loan debt relief, insisting that students be taxed higher interest rates to pay down the deficit.

“House Democrats are doing everything we can to stand up for America’s students and families today,” said Rep. Miller. “The Republicans’ failure to act in a responsible way that protects students and families is inexcusable. Their bill is so bad that students would still be better off if rates were allowed to double in July. They aren’t solving the problem; they’re making it worse. I urge my colleagues to allow an up-or-down vote right away on a bill that stops the interest rate hike without harming students and their families. Time is short.”

If Congress fails to act by July 1, interest rates on subsidized students’ loans will double from 3.4 percent to 6.8 percent for millions of the neediest students. This year, and every year, Congress doesn’t act will cost a student borrower $1,000. Failure to act now will add $4.3 billion to students’ debt burden for next year’s loans alone. According to the nonpartisan Congressional Research Service (CRS), the bill that Republicans pushed through the House last month would increase student debt and leave students worse off than if these interest rates were allowed to double on July 1.

Rep. Courtney’s bill, the Student Loan Relief Act (H.R. 1595), would lock in the 3.4-percent interest rate on subsidized Stafford student loans until July 1, 2015, buying time for Congress to develop a long-term solution on student loan debt.

Standard GOP procedure: using a crisis that threatens tens of thousands of citizens as a lever to get their insanely bad ideas enacted. This one stunt alone should result in Republicans losing their majority in the House. But thanks to the art of gerrymandering, the desires of the people don't mean so much anymore.