FOR IMMEDIATE RELEASE:
May 10, 2013
Young Invincibles’ Statement on The Smarter Solutions for Students Act (H.R. 1911)
[WASHINGTON, DC] – Yesterday, House Republicans proposed The Smarter Solutions for Students Act (H.R. 1911). Interest rates on Federal Stafford Loans are set to double from 3.4 percent to 6.8 percent on July 1, 2013 unless Congress acts. The bill changes the way interest rates are set on student loans to a variable rate with a cap, setting rates at the Treasury bill plus 2.5 percent for both unsubsidized and subsidized loans, and the rate at the Treasury bill plus 4.5 percent for PLUS loans.
Rory O’Sullivan, Policy Director for Young Invincibles said, “We are encouraged by the inclusion of an interest rate cap in the Smarter Solutions Act. In fact, every long-term solution released this week included a cap on interest rates, acknowledging that it is essential for any long-term interest rate solution. However, in 7 out of the next ten years, interest rates under the House Republican proposal would be higher than the status quo, meaning it would simply trade lower interest rates today for higher rates and more debt down the road. Moreover, interest rates on some loans could still reach double digits, and the proposal sets rates in a way that makes more money off students and puts it toward deficit reduction. We look forward to working with lawmakers from all parties to come to a solution that provides students with low rates in the long-term.”
Young Invincibles is a national organization committed to amplifying the voices of young Americans, aged 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.