Garamendi Votes for Bipartisan Student Loan Bill
WASHINGTON, DC – Congressman John Garamendi (D-Fairfield, CA), whose district includes UC Davis, today voted for a bipartisan compromise student loan bill. The legislation was necessary after subsidized Stafford Student Loan interest rates doubled from 3.4 percent to 6.8 percent on July 1st.
“This compromise is the best of a bad situation. In the short term, given the makeup of this Congress, this was the best possible outcome for students and parents looking to pay for an education,” explained Congressman Garamendi. “College will be more affordable with this bill than without it, and that’s the bottom line.”
Congressman Garamendi has been deeply frustrated by the inability of Congress to at a minimum preserve the 3.4 percent subsidized Stafford student loan rate which expired on July 1st. This compromise lowers the subsidized rate down to 3.86 percent for undergraduates and locks that rate for current borrowers. Likewise, future borrowers will have the peace of mind of knowing exactly what they’re signing up for, as the rates for the life of each loan will be fixed at the loan’s outset.
He added, “America’s students deserve a Congress fighting for them. Affordable education should be a bipartisan priority. I don’t understand how anyone can think student loan rates are too generous, and I will continue to fight for the best possible situation for students in my district. Too often this Congress blindly cuts funding for research, student aid, and other college priorities, and it’s undermining our economy’s long term growth. Let’s get our priorities straight. I join my colleague House Education Committee Ranking Member George Miller in urging Congress to use the Higher Education Act reauthorization to bring down the cost of college.”
In May, with almost no Democratic support, the House passed H.R. 1911, a bill that makes college more expensive for students and families. H.R. 1911 would have increased students’ total debt burden by billions of dollars, and a Congressional Research Service (CRS) analysis shows that the proposal is even worse for students than the 6.8 percent rate that took effect on July 1st for subsidized Stafford loans. What’s more, H.R. 1911 would have allowed rates to fluctuate through the life of a loan based on market conditions, meaning students would have had no way to plan for the future.
The student loan compromise, passed 81-18 in the Senate and 392-31 in the House, improves the current student loan situation by:
- Allowing rates on every single new college loan to come down this year for nearly 11 million borrowers;
- Providing students with $25 billion in debt relief over the next six years compared to current interest rates;
- Allowing today’s students and families to lock in historically low interest rates for the life of the loan; and
- Saving the average undergraduate with a loan nearly $1,500 in interest over the life of that loan. Undergraduates will borrow at 3.86 percent, a cut from 6.8 percent. Graduate students will borrow at 5.4 percent, a cut from 6.8 percent. Parents and graduate students borrowing PLUS loans will borrow at 6.4 percent, a cut from 7.9 percent.
As a UC Regent and CSU Trustee, Garamendi voted against every undergraduate tuition increase, because pricing students out of an education is bad public policy.
UC Davis’s Financial Aid Office compiled the following preliminary information on student loans at UC Davis for 2012-2013:
For Direct loans, UC Davis has disbursed a total of $105,335,982 to 13,982 students, broken down as follows:
· Subsidized: $49,616,667 to 11,270 students
· Unsubsidized: $55,719,315 to 5,833 students
Please note that the number of students for subsidized and unsubsidized will not add up to the total number of students that received Direct loans, as some students receive both loan types.
For PLUS Loans, UC Davis has disbursed just over $28.7 Million to more than 2,000 students, broken down as follows:
- Undergraduate: Approximately $18 Million to 1,366 students
- Graduate: Close to $11 Million to 705 students