A looming doubling of interest rates for most student loans is being decried by Reps. Scott Peters, Juan Vargas and Susan Davis.
The three San Diego Democrats appeared at San Diego Mesa College on Friday to call for keeping the current rate of 3.4 percent in place, even though Peters voted for a bill that could see the rates rise beyond that figure.
That current rate established by Congress in 2007 is scheduled to expire July 1. Barring legislative action, it will automatically climb to 6.8 percent.
“The kids who were lucky and whose families could afford to pay for college won’t be the ones in a bind – it will be the ones who really wanted to go to school and made it there by taking out loans,” Vargas said.
Peters said the current rate should stay in place for at least two more years.
He said he voted for the Republican-sponsored “Smarter Solutions for Students Act” on May 23 because it ties the annual interest rate for Stafford loans, the most common issued by the federal government, 10-year Treasury bonds plus 2.5 percent. Vargas and Davis voted against it.
“I’m open to some compromise,” Peters said. “I understand that legislation involves give and take and compromise, and I went to Washington because I want to accomplish things.”
The House bill would cut the deficit by close to $4 billion over 10 years. Peters was one of four Democrats who crossed the aisle to vote for it. He issued a statement after that vote saying he did so in order to keep Stafford rates from doubling.
“I have been vocal in my support for a different measure - H.R. 1595, the Student Loan Relief Act - which would freeze rates at their current level for two more years while Congress works on this issue,” he said.
Vargas said raising rates would “be one of the dumbest things I’ve ever seen.”
“In today’s economy, students need all the help they can get as they try to achieved their educational dreams,” he said.
A bill being hammered out in the Senate would link new loans to Treasury bond rates for the entire loan pay-back period.
The Associated Press reported that a doubling of the current rate would cost the average student borrower an extra $2,600.