WASHINGTON - U.S. Senator Tom Udall (D-NM) today expressed disappointment that the Senate again failed to act to prevent interest rates from increasing on loans for college students in New Mexico and across the country.
Last month, because of gridlock in the Senate, Congress failed to prevent a temporary agreement from expiring, causing interest rates on new federal subsidized Stafford loans for undergraduates to double from 3.4 percent to 6.8 percent. Today, the Senate considered legislation that could have retroactively extended the lower interest rate for another year, but the bill - the Keep Student Loans Affordable Act of 2013 - failed on a procedural vote.
After the vote, Udall spoke on the Senate floor, urging his colleagues to act before students go back to school this fall. In his speech, he used the example of two students from New Mexico, who already are finding it hard to make ends meet while they attend college.
Click here to watch Udall's speech.
"These students are struggling. Our economy is slowly recovering. Now is not the time to set up more barriers," Udall said. "Now is not the time for interest rates to double - weighing down students, weighing down hardworking families, weighing down the middle class. ...The average college senior has over $26,000 in debt at graduation. Some have much more. That burden is heavy enough. We should not be adding to it now."
Udall is a cosponsor of the Keep Student Loans Affordable Act and has encouraged Congress to prevent the rate increase on students for another year while lawmakers work on a broader, more comprehensive solution to skyrocketing college costs.
"Higher education is at a tipping point, and we need a long-term plan - a plan that is sustainable, that is comprehensive," Udall said in his remarks. "These are complicated questions; they require careful answers. But one principle should be clear: For fairness, for investing in our nation's future, college should be within reach of all American families - not just the privileged few."
About 40,000 N.M. students rely on Stafford loans to pay for college. The Keep Student Loans Affordable Act would save new undergraduate Stafford loan borrowers at N.M. universities an average of almost $1,000 over the life of their loans.
Udall has long said he wants to see student loan rates considered in a comprehensive way, through reauthorization of the Higher Education Act, to make college more affordable for all families and find a long term solution that will help N.M. students. Last year, Udall also voted to extend the subsidized rate for new Stafford undergraduate loans for one year, in order to give Congress time to work on the broader issue. Udall has also supported several bills in the last two years to maintain the subsidized rate on new undergraduate student loans.
The following are Udall's remarks as prepared for delivery:
Last week, 40,000 students in my state got some very bad news. The rates on new Stafford student loans doubled. And today, these students got bad news again. Today, our nation's students once again wait in vain for relief.
These students work hard. They are ambitious. They know how important a college education is. They know what it means to their future and to our nation's future. They expected more of us. And I share their disappointment.
We saw this coming. This bus has been approaching the cliff for a year. That ought to be time enough to turn it around - and turn it around without throwing students underneath it. I know that many of my colleagues here are trying...trying to find a long-term solution.
But, today, we failed, and our nation's students pay the cost of that failure. For so many in my state, grants and loans make the difference. Federally subsidized Stafford loans are crucial - opening a door to college, to opportunity and to investing in our future.
We all know these students. Most have lower incomes and fewer advantages. We ask them to work harder, and now we ask them to pay more. They are folks like Lori Cole. Lori was quoted in the Las Cruces Sun-News. She said, "I'm almost 50 years old and returned to school last year. I've had to take out loans on top of my grants. I don't like the rates going up but what can I do? I have a teen in college and a mortgage. I have no choice but to continue with my student loans if I ever want to make more than $10 an hour."
They are folks like Josh Dunne. Josh wrote the following on Facebook: "As a disabled combat vet, my wife and I who are both students, do not have a choice but to eat the increase... I don't understand how they can continue to raise the rates on us not only for tuition but now also the loan rate and expect the amount of students to continue to go to school. Hope they can figure it out for our future."
I say to Josh. And to so many other students like him. I hope we can figure it out too. These students are struggling. Our economy is slowly recovering. Now is not the time to set up more barriers. Now is not the time for interest rates to double, weighing down students, weighing down hardworking families, weighing down the middle class.
The Keep Student Loans Affordable Act of 2013 would have helped, keeping the interest rate at 3.4 percent for new Stafford loans for one year and giving Congress time for a broader solution - because the problem is not just interest rates. It is the growing burden of student debt.
Higher education is at a tipping point, and we need a long-term plan - a plan that is sustainable, that is comprehensive. These are complicated questions; they require careful answers. But one principle should be clear: For fairness, for investing in our nation's future, college should be within reach of all American families - not just the privileged few.
Students know how to set goals. They know how to set priorities. They expect the same of us. And priorities come down to choices. The Keep Student Loans Affordable Act offered a choice: To help students, to work toward real solutions. And we could do it by simply closing a tax loophole - no new tax, no new debt - just closing a tax loophole - not exactly a radical notion.
I will do all I can to ensure the Senate will find its way to long-term answers. We will not give up on this issue. Seven million students and their families are waiting - waiting for predictability, waiting for more affordable education, and control of spiraling costs. They and their families do the heavy lifting - every day. We should lend them a hand.
The average college senior has over $26,000 in debt at graduation. Some have much more. That burden is heavy enough. We should not be adding to it now.
