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Young Invincibles’ Statement On Interest Rate Deal Being Signed Into Law

FOR IMMEDIATE RELEASE:
August 9, 2013

Contact: Colin Seeberger
colin.seeberger@younginvincibles.org
214-223-2913

Pres. Obama Signs Student Loan Interest Rate Deal Into Law, Locking In $184 Billion Profit Off Students

Today, President Obama signed the Bipartisan Student Loan Certainty Act, H.R.1911, into law. The legislation trades low interest rates this year in exchange for much higher rates in just a few years, and locks in a projected $184 billion in profits off of students and families for the federal government.

By 2015, graduate students could be paying more than 6.8 percent interest. By 2017, undergraduates could be paying more than 6.8 percent interest. In addition, the law will also make an additional $715 million off the backs of students and families, funneled directly to deficit reduction. The law codifies a worse deal for students and families than if Congress did nothing at all.

Interest rates will be pegged to the 10-year Treasury bill, plus 2.06 percent for undergrads with a cap of 8.25, plus 3.6 percent for graduate students with a cap of 9.5, and plus 4.5 percent with a cap of 10.5 for PLUS loan borrowers.

Rory O’Sullivan, Policy and Research Director of Young Invincibles, said:

“This is a disappointing deal for students. While students returning to school this fall will pay lower rates, we can’t ignore the high rates that their younger siblings will pay in just a few years. We are encouraged by the floor statements of several members of Congress, indicating that they do not view the proposal as permanent. We look forward to working with Congress and the Administration in the months ahead as we head into Higher Education Act reauthorization to identify policies that will actually decrease student debt and reduce college costs.”

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Young Invincibles is a national organization committed to amplifying the voices of young Americans, ages 18 to 34, and expanding economic opportunity for our generation. Young Invincibles ensures that young Americans are represented in today’s most pressing societal debates through cutting-edge policy research and analysis, and innovative campaigns designed to educate, inform and mobilize our generation to change the status quo.