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Mr.
GordonWayne Watts
821 Alicia Rd
Lakeland, FL
33801-2113
Dear Mr. Watts:
Thank you for
contacting my office regarding H.R. 3451, the Student Loan
Bankruptcy Parity Act of 2015. I appreciate you taking the
time to share your views on this important matter, and I
welcome the opportunity to respond.
As you may know,
H.R. 3451 was introduced by Representative Daniel T. Kildee
on November 8, 2015 and seeks to amend title 11 of the United
States Code to make student loans dischargeable in bankruptcy
cases.
Students are the foundation of our country's
future. Ensuring they have the ability to afford a college
education is the first step in preparing them to compete in
an increasingly global marketplace.
Over the past 25
years, the cost of going to college has quadrupled. About 60%
of students take out loans to finance their education, and
more than half borrow over $10,000. In 2010-2011, 7.6 million
undergraduate students borrowed Subsidized Stafford Loans.
The U.S. Department of Education (ED) estimates over 7.4
million undergraduate students will have borrowed Subsidized
Stafford Loans in 2012-2013. Students in the Class of 2013
graduated with an average of $30,000 in debt.
Additionally,
the issue of student debt also affects our deficit. The
Congressional Budget Office has projected that every dollar
lent in 2010 by the William D. Ford Direct Loan Program,
administered by the Department of Education, would add 13
cents to the federal deficit. Given that the government
disbursed $27.7 billion in subsidized Stafford loans, that
13-cents-on-the-dollar ended up costing $3.6 billion. As a
result, the Department of Education added $3.5 billion to the
federal deficit in 2010, with subsidized Stafford loans
alone.
You may be interested to know, Representative
John Kline (MN-02) introduced H.R. 1911, the Smarter
Solutions for Students Act, on May 9, 2013 and seeks to set
floating rates on new Stafford loans at the 10-year Treasury
rate plus 2.5%. At the same time, it would also protect
borrowers by capping the rates at 8.5%. Under this plan, a
borrower could consolidate his or her loans after graduation
to achieve a fixed rate. H.R. 1911 passed the House, with my
support, on May 23, 2013.
Following the House passage,
the Senate amended this bill, such that, as enacted into law,
it sets the annual interest rate on Stafford loans at the
rate on high-yield 10-year Treasury sets plus 2.05%, but caps
the rate at 8.25% for undergraduates. For graduate students,
this law sets interest rates at the rate on high-yield
10-year Treasury notes plus 3.6%, capped at 9.5%. This
bipartisan solution passed the Senate on July 24, 2013, by a
vote of 81 to 18, and the House on July 31, 2013, with my
support, in an overwhelming vote of 392 to 31. President
Barack Obama signed it into law on August 9, 2013, making it
law.
Student loans are an essential component to
making the cost of college more affordable, which is why I
lent my full support to this measure.
H.R. 3451 has
been referred to the House Committee on the Judiciary, of
which I am not a member. Please know should this bill come
before the full House of Representatives for a vote, I will
be sure to keep your concerns in mind.
Most students
are now saddled with extraordinary debt and are entering one
of the weakest recoveries in history. As the father of two
sons in today's economy, I know first-hand the important role
education plays in today's society and I will continue to
work with my colleagues on solutions to reduce both the cost
of education and the student debt in our country.
It
is an honor and privilege to represent constituents like you
of the 15th District of Florida. To learn more on how I may
serve you, please visit http://dennisross.house.gov. Please
feel free to continue to contact me in the future.
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