Mr.
GordonWayne Watts
821
Alicia Rd Lakeland, FL 33801-2113
Dear
Mr. Watts:
Thank
you for contacting my office regarding student loans and
debt. I appreciate you taking the time to share your views on
this important matter, and welcome the opportunity to
respond.
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.
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.
|