40,703 Students In New Mexico Could Be Hit By Devastating Student Loan Rate Hike If Congress Fails To Act By July 1st
WASHINGTON, D.C. - Today, U.S. Senator Martin Heinrich (D-N.M.) voted in favor of S. 953, the Student Loan Affordability Act of 2013, a fiscally responsible bill he is cosponsoring to keep student loans interest rates low. The bill failed by a vote of 51 to 46, which didn't meet the 60 vote threshold.
Unless Congress acts, the current 3.4 percent fixed interest rate on Stafford Federal Subsidized Loans will double to 6.8 percent on July 1, 2013. This would effectively raise costs for more than 7 million student borrowers--including 40,703 students in New Mexico.
"We should stop playing games with our students' futures," said Sen. Heinrich. "The year-to-year extensions put stress on New Mexico's middle class and on hard-working students during a time when they should be focusing on their studies. We need to give students a fair shot at succeeding in a tough economy, not saddle them with more debt."
The Senate Democratic proposal, the Student Loan Affordability Act of 2013 introduced by Senators Jack Reed (D-RI) and Tom Harkin (D-IA), would freeze need-based student loan interest rates for two years while Congress works on a long-term solution to slow the rapid accumulation of student-loan debt, and is fully paid for by closing three egregious tax loopholes. Specifically, the bill would: limit the use of tax-deferred retirement accounts as a complicated estate planning tool; close a corporate offshore tax loophole by restricting "earnings stripping" by expatriated entities; and close an oil and gas industry tax loophole by treating oil from tar sands the same as other petroleum products.
Sen. Heinrich has consistently fought to keep higher education within reach for all New Mexicans. He said, "A college education should be affordable and within reach for every family in New Mexico. Unfortunately, Republicans are pushing for a plan that would burden students and families with high student loan interest rates. My proposal would help keep college more affordable. I will continue to fight and support legislation to keep student interest rates low so everyone willing to earn a college education can afford one."