Protect Students and Families: Support S. 2343 and Stop the Student Loan Interest Rate Hike

Recipient: U.S. Senate

Dear Senator:

On behalf of The Leadership Conference on Civil and Human Rights, a coalition of over 210 national organizations charged with the promotion and protection of the rights of all persons in the United States, we write to urge you to maintain the current 3.4 percent interest rate on subsidized Stafford student loans.  We applaud the bipartisan commitment to keeping the student interest rates low.

We urge you to support S. 2343, the “Stop Student Loan Interest Rate Hike Act of 2012,” introduced by Senators Harkin, Reed, and Brown, which would offset lowered interest rates by closing a corporate tax loophole.  We also urge you to oppose S. 2366, the “Student Loan Interest Rate Reduction Act” (S. 2366), introduced by Senator Alexander, which would maintain the lower rate by raiding funds for children and families under the Affordable Care Act (ACA).

The Leadership Conference supports S. 2342 because it will maintain the lowered interest rate for those students most in need, while paying for it in a way that does not harm American students and families.  We oppose S. 2366 because – like the recently passed House bill, H.R. 4628 the Interest Rate Reduction Act – it would offset the cost of lower interest rates by siphoning off funds from the Prevention and Public Health Fund of the ACA.  The fund supports a wide range of vital public health and preventative services, including, e.g., child immunizations, breast cancer screenings, smoking cessation programs, and prevention of obesity, diabetes, heart disease, and cancer.  All of these programs keep Americans healthy and productive and save health-care costs in the long run.  Proposing to keep interest rates in check for lower- and middle-income families by curtailing health care for these same families is self-defeating and unacceptable.

If Congress fails to act before June 30, 2012, interest rates for eligible students will increase from 3.4 percent to 6.8 percent.  Student loan debt in the United States is already alarmingly high, approaching $1 trillion, and exceeding Americans’ debt for credit cards.  Permitting the interest rate to double in July would be particularly devastating to low-income students, students of color, and women, including many young parents, returning veterans and those with disabilities, who often experience significant barriers to college access and completion.  For example:

• 68 percent of low-income students borrow money to attend college and would have a more difficult time affording the costs of post-secondary education.^[i]
• 30 percent of undergraduates in 2007-08 received a subsidized Stafford loan, a  majority of them women.  Yet in 2009, the average woman who worked full time earned just over 77 cents for each dollar earned by her male counterpart.  Because women are more likely to borrow than men, female students and graduates are more likely to struggle with their loan debt.
• Minority students rely more heavily on federal student loans than white students. In 2008, African-American students graduated with an average of $30,000 borrowed from the federal government, Latino students borrowed $22,400, and white students borrowed $18,600.^[ii]

While The Leadership Conference strongly supports measures to expand college access and to mitigate student debt, we also strongly oppose legislation that would scale back the ACA.  In conclusion, we urge you to protect students, children, and families by supporting S. 2343 and opposing S. 2366.

Thank you for your consideration.  If you have any questions, please contact Dianne Piche, senior counsel, at [email protected], or 202-466-3311.

Sincerely,