Bipartisan Student Loan Certainty Act of 2013
I'm very pleased that finally we are taking action on the pressing issue of college affordability for constituents of mine across Colorado and Americans across our country.
Absent congressional action, the current law today has effectively doubled the interest rate that our neediest families pay to be able to borrow money for afford college to 6.8 percent. I believe that the previous bill that passed the House was better than the doubling to 6.8 percent. It would save families money in the short- and medium-term while Congress worked through a final solution. But I'm very proud to say here today that this bill is far better. And I encourage my colleagues on both sides of the aisle to support this bill, which has several features that are strong improvements over the original House-passed version, including a fixed interest rate for the life of the loan so that our students are not beholden to the fluctuations of the market when they can least afford it--after they graduate.
This bill would keep interest rates low for our neediest students and their families, providing some certainty and some surety. Under this bill, the typical undergraduate student borrower this year will save $1,500 over the life of a loan. A graduate student will save over $3,000.
This bill is a step towards making sure that our student loan system is not subject to the whims of Washington every week, with arbitrary expirations and control over the interest rate. We have to make sure that our students are able to plan their futures.
This bill is but the first step in the much-needed reforms that we need as we reauthorize the Higher Education Act. I encourage all of my colleagues to support this bill to keep college affordable now, and I hope that my colleagues will be able to consider Representative Petri's and my H.R. 1716 bill as we look towards long-term solutions.
The ExCEL Act, H.R. 1716, would replace this complicated array of loans, subsidies, deferments, forbearances, and repayment options with a single loan repaid through simplified and improved income-based repayment. One of our goals is to protect our neediest Americans. Income-based repayment is a better tool than interest subsidies. While interest subsidies are based on a student's family income before school, income-based repayment ensures that students are protected when they truly need it--when they graduate from school, if they go through tough times, or if they're in a service-related profession. Under the ExCEL Act, we include strong borrower protections so our neediest students after graduation will be paying effectively a zero percent rate for the balance of their payments.
We need to pass this bill now and send it to President Obama to prevent our students this fall from paying 6.8 percent. I hope we can continue the discussion and dialogue about thoughtful student loan reform proposals like the ExCEL Act that address keeping college affordable for American families.
I am so grateful the Democrats and Republicans have come together to, hopefully, pass a bill here today that will be able to be brought to President Obama for his signature to provide some commonsense and predictability by lowering the student loan interest rates from 6.8 percent, which they are under statute today, and putting us on a path toward fiscal sustainability.
I urge my colleagues to support this bill.
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