Rep. Chu Denounces Effort to Burden Students with National Debt

Today, the House of Representatives passed H.R. 1911, legislation that would tie student loan interest rates to the 10-year Treasury bond. With market rates at an all-time low, the immediate impact would be lower rates than current law at 6.8 percent. However, as the U.S. economy continues to recover from the Great Recession, interest rates on student loans will increase and could reach as high as 10.5 percent in coming years. In doing so, H.R. 1911 raises $715 million in revenue from students. Rep. Chu released the following statement:

“Supporting higher education is one of the best financial investments the federal government can make for our economic future and the success of the next generation. But the bill I voted against today is literally a bait-and-switch for the youth of America. A few years of low interest rates in the short run are not worth the high cost our nation will pay in the long run as market rates invariably rise, bringing student loan rates up with them. The inflated costs of higher education will place bachelors and advanced degrees out of reach for many Americans. This will hold them back from reaching their true potential and deny our economy of the contributions they would otherwise make.”

H.R. 1911 passed the House by a vote of 392 to 31.