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0% Interest: Pingree, House Dems Make Push to Eliminate Federal Student Loan Interest

 Today, Congresswoman Chellie Pingree (D-Maine), led by Rep. Joe Courtney (D-Conn.) and Sen. Peter Welch (D-Vt.), introduced legislation to lower the cost of college for current and future borrowers. The Student Loan Interest Elimination Act would refinance the interest on federal student loans for all existing borrowers to zero percent and cap interest rates for future borrowers. Thanks to this fix, 43 million Americans with existing federally held student loans would see their interest rates immediately eliminated. 

“The COVID-era student loan payment and interest pause was a critical lifeline for hardworking Americans and made clear just how bad the student loan crisis had become. But as Republicans and their right-wing Supreme Court work tirelessly to undo President Biden’s hugely popular student loan forgiveness plan, millions of borrowers across the country are facing down crippling debt with payments set to resume,” said Pingree. “The Student Loan Interest Elimination Act will help ease the financial burden that unfairly comes with pursuing higher education and will work to reform the system that fostered this crisis in the first place.”

“Students and families are already saddling the rising costs of a college education. The federal government should not exacerbate the problem by making money off borrowers’ federal student loans. In fact, the average public university student who takes out a federal student loan today would pay $7,800 over the standard 10-year period in interest. That’s the difference between making mortgage or car payments, affording medical care, or saving for a stronger retirement,” said Courtney, a senior member of the House Committee on Education and the Workforce. “This bill is particularly important in the wake of SCOTUS’ decision to strike down President Biden’s student loan forgiveness program. Students and families are counting on Congress to act on commonsense solutions to lower the cost of college and my bill will help achieve that goal.”

“Student debt holds so many Vermonters back from achieving their dreams—whether they’re hoping to buy a home, grow their family, or simply trying to make ends meet. It shouldn’t be this expensive to get an education, and it shouldn’t be this hard to pay off your debt,” said Welch. “We can—and should—keep pushing for debt forgiveness, but we also need to make college more affordable for future generations and avoid saddling students with additional debt from high interest rates. By reducing the interest rate on existing federal student loans and capping future interest rates, The Student Loan Interest Elimination Act makes an affordable college education a reality for more students in Vermont and across the United States.”

The interest rates for future student loan borrowers will be based on a sliding scale determined by financial need. No student will have an interest rate greater than four percent. This sliding scale will disincentivize students from taking out loans that they do not need. Importantly, the bill establishes a Trust Fund to pay for the student loan program’s administrative expenses that are currently covered by the interest paid by borrowers.   

“Congress can no longer ignore the growing student loan debt crisis in this country," said Rep. Eric Swalwell (D-Calif.). “Tens of millions of students across this country, including myself, pursued higher education and ended up with crushing student loan debt which makes purchasing a home, starting a family, or sometimes even affording groceries, impossible. The Student Loan Interest Elimination Act will eliminate interest rates on most existing and future federal student loans to help borrowers pay off their debt and get on with their lives.”

"As the Ranking Member of the Higher Education and Workforce Development Subcommittee and a lifelong educator, I have worked tirelessly to promote accessible and affordable college education for all Americans. The urgency of the student loan crisis cannot be ignored; it demands immediate action. That’s why I’m proud to join Representative Joe Courtney as an original cosponsor of the Student Loan Interest Elimination Act, a critical bill that provides essential reforms to our student loan system, shielding our students from oppressive interest rates. The groundwork laid by this bill opens doors to innovative solutions that addresses the dire student loan crisis head-on. I stand committed in my support for legislation that eases the burden of student debt and supports our hard-working students in their pursuit of higher education. By advancing this bill, we propel the promise of higher education to new heights, empowering a brighter and more equitable future for all our ambitious scholars,” said Rep. Frederica Wilson (D-Fla.).

“The Student Loan Interest Elimination Act is a strategic way to deliver student debt relief to Americans most in need. For many, the interest on student loans is more than was originally borrowed," said Rep. Jahana Hayes (D-Conn.). “This legislation will save tax-payer dollars while also addressing the student loan crisis in this country. I will continue to fight for student loan relief for the people of Connecticut and across the nation."  

“Encouraging young people to pursue college is one of the most important things we can do to invest in our nation’s future and build a stronger middle class. The United States should never have been in the business of profiting off students,” said Rep. Raúl Grijalva (D-Ariz.). “I’m proud to join my colleagues in introducing this legislation that will ease the lives of student loan borrowers by reducing interest rates to zero percent and reform student loan financing for future borrowers. As we move forward, it’s critical that we build on this legislation and address the underlying root issues of college affordability that continue to keep a higher degree out of reach.”

“Forgiving student debt is key to granting Americans the freedom to purchase a home, start a business, and spend extra money in local economies. I am proud to support the Student Loan Interest Elimination Act, a groundbreaking solution that tackles the burden of student debt head-on and is a pivotal step towards comprehensive student loan reform,” said Rep. Troy A. Carter, Sr (D-La.)

“As borrowers continue to experience the crushing weight of student loan debt, I’m proud to cosponsor the Student Loan Interest Elimination Act, legislation that reconfigures federal student loan interest. This bill will save taxpayer dollars, enable investments to increase Pell Grants, and support college completion initiatives through a sustainable Trust Fund,” said Rep. Mark Takano (D-Calif.). “I'm honored to join Representative Courtney in this effort to ensure higher education remains both affordable and accessible for all students.”

“Congressman Courtney and Senator Welch have figured out a way to eliminate student loan interest and help student loan borrowers. Their innovative solution of investing students’ principal repayments to earn a return is the first plan that addresses the cost of the student loan program. It comes at a critical time as students must renew payments this fall without the benefit of cancellation,” said Bob Hildreth, president of the Hildreth Institute, a research and policy center focused on improving access to higher education.

“The Student Loan Interest Elimination Act would provide significant relief for student borrowers and help expand access to educational opportunity. Its passage would be an important step toward a long-term solution to the student loan crisis,” said David Tritelli, Vice President for Communications and Public Affairs, American Association of College and Universities.

The bill is endorsed by the American Association of Colleges and Universities, the Education Trust, and the Hildreth Institute. 

To read a fact sheet on the bill, click here

To read a section by section on the bill, click here


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