Sen. Tom Coburn, R-Okla., and Sen. Richard Burr, R-N.C., introduced a student loan interest rate reform bill Wednesday afternoon based on a proposal put forth last month by Jason Delisle, director of the Federal Education Budget Project at the New America Foundation. The bill - titled the Comprehensive Student Loan Protection Act (S.3266) - is a no-cost solution to the impasse on extending the 3.4 percent interest rate on Subsidized Stafford student loans.
The Comprehensive Student Loan Protection Act would peg fixed rates on all new federal student loans to the 10-year Treasury rate plus 3.0 percentage points. Delisle's proposal comes at no cost to taxpayers, according to a 2011 Congressional Budget Office estimate, and would allow most undergraduate students to leave school with less debt than they would have under the extension of the 3.4 percent rate. Meanwhile, lawmakers are deadlocked on how to offset the $6 billion cost of extending the 3.4 percent rate for one year on only a subset of federal student loans, which are set to double on July 1 if Congress doesn't act.
With the introduction of the Comprehensive Student Loan Protection Act, Senators Coburn and Burr have acted on Delisle's recommendation that Congress consider interest rate reforms that are permanent and apply to all newly-issued student loans.
To read more about Delisle's proposal, click here. For more on the budget implications of the proposal, click here.
To schedule an interview with Jason Delisle, please contact Clara Hogan at 202-596-3368 or firstname.lastname@example.org