Campaign 2010

Jun 20, 2013

FL Student, State Representative Alan Williams Urge Rep. Southerland to Stop Student Loan Rate Spike

Congressman Steve Southerland claimed that he would change Washington, but he keeps showing that he’s become part of the problem in DC.  That’s why this morning, State Representative Alan Williams joined Adam Rosenthal, a student at Florida State University, on a conference call condemning Congressman Southerland for voting to make students pay more and urging Congressman Southerland to finally act to stop student loan rates from spiking.

“Congressman Southerland said he’d change Washington, but Congressman Southerland’s vote shows that he’s not looking out for the students and families of north Florida which we both represent, ” said State Representative Alan Williams. “The clock is ticking, and north Florida families need Congressman Southerland to stand up to the broken politics of Washington and finally fix this problem before loan rates spike for students and their families.“

If Congress fails to act,  loan rates will double for students across Florida on July 1st, and after that it could get worse: under the “Students Pay More Act” supported by Congressman Southerland, Florida students and their families could see their loan rates spike as high as 8.5 percent. According to the Associated Press, this proposal supported by Congressman Southerland “would cost students and families heavily.”

“In just two weeks, Florida students and families will see their loan rates spike unless Congressman Southerland finally shows some leadership and takes action to stop the rates from doubling,” said Adam Rosenthal, a student at Florida State University. “Floridians know that education is the key to growing our economy, but Congressman Southerland’s vote to make students pay more, and his refusal to fix this problem, will make school less affordable and less accessible for middle class families. The stakes are too high – if Congressman Southerland continues refusing to act, Florida students and our families will be the ones paying the price.”  

A recording of the call is available upon request.

BACKGROUND:

Student Loan Rates Set to Double on July 1. “Incoming college freshmen could end up paying $5,000 more for the same loans their older siblings have, if Congress doesn’t keep interest rates from doubling. If that sounds familiar, it’s because the same warning came last year. But now the presidential election is over, and mandatory budget cuts are taking place. That makes a deal elusive to stop interest rates from doubling on new loans before a July 1 deadline.” [Associated Press, 3/28/13]

Congressman Southerland Voted to Raise Student Loan Interest Rates Up to 8.5 Percent. In May, Southerland voted for the House Republican student loan proposal. According to the Associated Press: “Under the GOP proposal, student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. For instance, students who receive subsidized or unsubsidized Stafford student loans would pay the Treasury rate, plus 2.5 percentage points. Using Congressional Budget Office projections, that would translate to a 5 percent interest rate on Stafford loans in 2014, but the rate would climb to 7.7 percent for loans in 2023. Stafford loan rates would be capped at 8.5 percent, while loans for parents and graduate students would have a 10.5 percent ceiling under the GOP proposal.” [H.R. 1911, Vote #183, 5/23/13; Associated Press, 5/16/13]

Under the “Students Pay More” Act, Graduates Would Pay Almost $5,000 More in Student Loan Interest. The Associated Press reported: “In real dollars, the GOP plan would cost students and families heavily, according to the nonpartisan Congressional Research Service. The office used the CBO projections for Treasury notes’ interest rates each year. Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 percent. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000.” If the Republican plan were implemented, college graduates would pay $4,881 more in interest, compared to the current rate. [Associated Press, 5/16/13]

Over 50 Percent of Florida College Students Have Loan Debt. The Project on Student Debt reported that 51 percent of Florida College students have loan debt, with an average of $23,054 per borrower. [Project on Student Debt, accessed 5/21/13]