Costa Supports Bill to Bring Students Certainty
Washington, DC-Rep. Jim Costa supported legislation that won overwhelming bipartisan support in the House would reduce the interest rate for federal student loans before the beginning of the 2013-2014 school year. The Bipartisan Student Loan Certainty Act of 2013 will reduce student loan interest rates and save students up to $1,500 over the life of the loan. The bill is now headed to the President who has signaled he will quickly sign the legislation.
“The interest rate roller coaster ride is over for students in our Valley and across the nation,”said Costa. “My sister and I were among the first in our family to attend college so I know firsthand the power of a college education. This compromise keeps the dream of a degree within reach by providing real savings for students next year.”
“At a time when student loan debt exceeds $1 trillion, it is clear that the future of our economy depends on preparing our students for careers without saddling them with massive debt for the rest of their lives. Student loans are just one part of the equation, and it’s time for us to finally have a real conversation about college affordability in this country.”
As of July 1st, student loan interest rates doubled from 3.4% to 6.8% because Congress failed to act. Earlier this month, Costa joined students and representatives of Valley community colleges and universities to call for immediate action on federal student loan interest rates.
The bipartisan bill will set federal student loan interest rates for next year at:
- 3.86 percent for all new undergraduate Stafford loans
- 5.4 percent for graduate Stafford loans
- 6.4 percent for PLUS loans for parents and graduate students
Interest rates at the time a student takes out a loan will be locked in for the life of the loan. In future school years, interest rates will be tied to the rate on 10-year Treasury bonds. However to protect students and their families, these rates are capped at 8.25 percent for undergraduate loans, at 9.5 percent for graduate loans, and at 10.5 percent for PLUS loans.