Stafford Student Loan Crisis Begins Monday, Former UC Regent/CSU Trustee Rep. Garamendi Outraged
WASHINGTON, DC – Congressman John Garamendi (D-Fairfield, CA), a former University of California Regent and California State University Trustee, is outraged by the shameful failure of Congress to stop the subsidized Stafford Student Loan interest rate from doubling. The rate is scheduled to double this Monday, July 1st, during a week the House Republican leadership has sent Congress home for vacation.
Several weeks ago, Congressman Garamendi signed a discharge petition that would force Speaker John Boehner to allow an up-or-down vote on a two-year extension of the current 3.4 percent interest rate if a majority of Members of Congress signed it. To date, 196 Members of Congress have signed the discharge petition, but it needs 218 signatories to force House Republican leadership to act. Congressman Garamendi is also a cosponsor of Congressman John Tierney’s Bank on Student Loan Fairness Act, which would reduce the Stafford Student Loan interest rate to a level comparable to the rate the nation’s largest banks receive from the U.S. Treasury. This legislation is similar to a companion bill introduced in the Senate by Senator Elizabeth Warren (pdf).
“It is shameful that my colleagues across the aisle in the House refuse to let us vote on simple legislation that preserves the subsidized Stafford Student Loan rate for two years. It’s also shameful that Republicans in the Senate filibustered this extension, despite it having majority support in the Senate,” said Congressman Garamendi, a graduate of UC Berkeley.
He continued, “The federal government will pocket $34 billion from student loans this year. For every dollar we loan to lower-income students, we get a $1.36 back. What more do my Republican colleagues want? Aren’t we taking enough money out of the pockets of people who just want a chance at a better life for themselves or their children? Let there be no mistake: the doubling of the Stafford Student Loan interest rate is just the latest in a series of preventable manufactured crises caused by dysfunctional leadership in the House and an obstinate minority in the Senate. I hope the American people are paying attention.”
At UC Davis, 11,000 students use Stafford Student Loans to help them pay for tuition.
On May 23, House Republicans passed H.R. 1911, the “Making College More Expensive Act,” a student loan bill that was even worse for students and families than allowing interest rates to double – with even higher interest payments by students and families. According to the nonpartisan Congressional Research Service, under their bill, students who borrow the maximum amount of subsidized and unsubsidized Stafford loans over five years would pay nearly $2,000 more in interest costs than if interest rates doubled.
As a UC Regent and CSU Trustee, Garamendi voted against every undergraduate tuition increase, because he believes higher education is already too expensive and already pricing qualified students out of an education.