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[Madison, WI] -- Senate lawmakers have agreed to a deal on student loan reform that is to be voted on as early as Tuesday of next week. The new deal makes long-term changes to the student loan system, which address Congress’ budget crisis by charging student loan borrowers more.
This deal locks in $184 billion of revenue from the federal loan program over the next ten years, in the form of high interest and fees that adds to student debt and makes education more expensive. Then, it goes further by generating an additional $715 million in revenue off the backs of borrowers, to be steered toward deficit reduction.
The deal does make a few concessions to students. It keeps a low rate of 3.85 percent for subsidized Stafford student loan borrowers this year, and builds in caps to protect borrowers from unlimited interest rates later, since the rates will now be pegged to the market. Yet these additions do little to lessen the impact of higher student loan debt built into the overall plan.
“For a Senate desperate for ways to balance the budget, this deal seems great. Yet in reality, this deal socks student loan borrowers with $185 billion to pay in the form of higher interest and fees over the next ten years, which will make college even more expensive. The costs students must assume are not even related to the costs of the loan program.
Student loans should invest in our future by making education affordable and accessible. Instead, the Senate is forcing students to pay more in order to reduce the deficit.
When you look closely, it becomes all too obvious that the Senate is looking to solve their own problems, not those of students. This plan neither helps students nor the economy.
We urge Senators to vote no."
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