Gov. Rick Scott has issued a stinging rebuke to the U.S. Congress for allowing federal student loan rates to double, accusing lawmakers of effectively imposing a new tax, to the tune of hundreds of dollars, on Florida families.
It is irresponsible for Congress to recess and allow student loan rates to double. Doubling the interest rate on federal college loans effectively kills the chance for many Florida families to live the American dream, Scott said in a statement Monday, blasting the federal legislature for taking its July 4 week's vacation. This is equivalent to a $936 tax on Florida families per loan each year. As I call for Floridas colleges and universities to hold the line on tuition, Washington bureaucrats must come back to work together on behalf of Floridas families and students.
The increases only affect loans issued after July 1.
In 2002, Congress arbitrarily fixed the federal student loan rate at 6.8 percent, in order to offer more adults the opportunity to finance a college education. Federal loans tend to offer greater relief than private-sector counterparts to borrowers who face financial hardship, and also offer specialized repayment plans based on a borrower's income and family size.
In 2007, Congress decided to fix subsidized Stafford loans, which are need-based, at 3.4 percent for the next five years. In 2012, Democrats decided they wanted to keep those rates artificially low, while Republicans wanted to align interest rates with market forces. President Barack Obama essentially endorsed the Republican plan, while proposing that interest rates be locked in for the life of any loan once issued.
Under either the president's and Republicans' proposal, rates would rise to 7.7 percent in 2023, according to the Congressional Budget Office.
The rising cost of a four-year degree at a university not only makes it difficult for our children to obtain a degree, but makes planning for college difficult for Florida families, Scott's statement continued. Floridas students and families now face higher education costs because Washington bureaucrats were unable to work together on behalf of Americas students. Fewer students will now be able to attend college and get jobs that require degrees because Washington chose politics over our families.
Reach Eric Giunta at email@example.com or at 954-235-9116.