Mr.
Gordon W. Watts 821 Alicia Rd Lakeland, FL 33801-2113
Dear Mr. Watts:
Thank you for your continued
correspondence regarding student loan debt. I appreciate you
taking the time to express your views on these important matters
and I 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 help make 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 mycolleagues on solutions to reduce both
the cost of education and the student debt in our country.
It
is an honor and a 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.
|