Dear Friends,

Here we are again.

The deadline for Congress to prevent the interest rate on need-based student loans from skyrocketing is fast approaching. On July 1st, my constituents and millions of students and families nationwide will see the interest rate for these loans double from 3.4 percent to 6.8 percent, adding another $1,000 of debt per year for every student borrower. When the law providing relief to student borrowers from high interest rates passed in 2007, an expiration date was included, and, last July, I voted to extend the law.

Three possibilities lie ahead.

1. The first would be for Congress to take no action. The interest rate would double, leaving student borrowers and their families in a lurch.
   
2. Second, the interest rate can be set to the market, a costly approach for borrowers in the long run because of the vagaries of variables.
   
3. Third, Congress can freeze the current low rate, keeping need-based student loans affordable.

My view is that Option #3 is the most prudent policy choice. A majority of new jobs in the next decade will require a college degree, making it an economic necessity that higher education remain an opportunity for every student, not just a perk for the privileged few. It's why we should freeze the current low interest rate on student loans to help keep college within reach for everyone.

Last week, I joined over 150 House Democrats in launching a Discharge Petition to force an up-or-down vote because the Republican leadership has refused to consider our legislation to freeze rates. Called the Student Loan Relief Act, the bill keeps the interest rate on student loans at 3.4 percent for the next two years. This will give millions of student borrowers and their families peace of mind, and it will give Congress time to enact comprehensive student loan reform. A Discharge Petition requires the signatures of a majority of Members of Congress (218) in order to send the bill automatically to the floor. There are currently 195 signatures.

On May 23rd, Republicans passed the Smarter Solutions for Students Act (H.R. 1911), a student loan bill that supposedly provides relief, but in fact exacerbates the interest rate. This bill sets the interest rate for student loans to the market, meaning they would be variable. According to the nonpartisan Congressional Research Service, under this bill, students who borrow the maximum amount of need-based loans over five years would pay nearly $2,000 more in interest costs. Senate Democrats have said they will not take up this damaging House bill.

I've worked hard to keep college affordable during my entire tenure in Congress, and I will continue to. Putting higher education within reach for every American is at stake. At a time when the unemployment rate for those with a college degree is about half the national average, it's never been more important.

Should you have any questions or comments, please let me hear from you.

Sincerely,


Anna G. Eshoo
Member of Congress