WASHINGTON, D.C. - Today, U.S. Senator Martin Heinrich (D-N.M.) voted for the Bipartisan Student Loan Certainty Act of 2013, a bill that lowers and caps interest rates on federal student loans, and protects borrowers from dramatic increases in the future. The proposal would cut rates on all new loans this year and save a typical undergraduate student in New Mexico $1,392 over the life of those loans. The bill passed 81 to 18.
"Keeping college within reach for New Mexico students is fundamental to a thriving middle class," said Sen. Heinrich. "I have consistently said that I would work to ensure student loan interest rates remain low, and this is a good first step. This bipartisan proposal isn't perfect, but it lowers interest rates for students in the near term and puts caps in place to protect students in the long term."
On July 1, the interest rate on federally subsidized Stafford loans doubled from 3.4 percent to 6.8 percent, affecting more than 11 million students nationally, including 46,104 undergraduate students in New Mexico. Under the compromise plan, students would pay a fixed interest rate for the life of the loan based on the 10-year Treasury bill plus a percentage add-on for all loans issued on or after July 1, 2013. Undergraduate borrowers would see their rates on new loans drop from 6.8 to 3.86 percent, and Graduate Unsubsidized Stafford borrowers will see their rates drop on new loans from 6.8 percent to 5.41 percent. And Grad PLUS and Parent PLUS borrowers would see their rates on new loans drop from 7.9 percent to 6.41 percent-the first reduction in years.
"This agreement is just one piece of the larger conversation concerning college affordability. During the reauthorization of the Higher Education Act, it's critical that Congress address the factors that contribute to rising college costs and contain student loan debt in the long run," said Sen. Heinrich.
Senator Heinrich also cosponsored the Reed-Warren amendment, a proposal that would have locked in reasonable caps of 6.8 percent for undergraduate and graduate loans, and 7.9 percent for PLUS loans, meaning they wouldn't go any higher than they are set at right now. The amendment failed by a vote of 46 to 53.