Rep. Karen Bass Introduces the Student Loan Fairness Act of 2013
REP. KAREN BASS INTRODUCES THE STUDENT LOAN FAIRNESS ACT OF 2013
Washington, D.C. – Today Congresswoman Karen Bass (D – Calif.) introduced The Student Loan Fairness Act of 2013 to address the out of control debt being placed on the backs of over 37 million student loan borrowers across the country and end the need for Congress to continue enacting short-term deals to stop interest rates from doubling, which is set to take effect July 1.
Student loan debt has surpassed the $1 trillion dollar mark – making it second only to mortgage debt. Americans owe more in student loan debt then credit card or automobile debt and it continues to grow. Over the past 10 years, the average student loan debt has increased by %511 with the majority of the debt being owed by those over the age of 30.
For these young adults, student loan debt is hampering their ability to contribute to America’s economic growth as they are forced to delay decisions on purchasing a home, starting a business or making smart investments because they are buried under the weight of student loan debt.
The Student Loan Fairness Act of 2013 addresses this problem in the following ways:
- Creates a 10-10 standard for student loan repayment, in which an individual would be required to make 10 years of payments at 10% of their discretionary income, after which, their remaining debt would be forgiven
- Permanently caps the interest rate for all federal student loans at 3.4%, ultimately eliminating the need to enact temporary measures every year to prevent rates from doubling
- Allow those eligible to convert their private loan debt into federal direct loans Suspends interest rates while borrowers are un-employed Rewards graduates for entering into public service
Congresswoman Bass said: “I’m introducing this legislation to address the crippling issue of student loan debt and the debilitating impacts this debt is having on American’s ability to contribute to the growth of the United States economy. In Washington we talk a lot about not passing debt onto the backs of our children and grandchildren – well there is no more immediate or direct debt on the backs of future generations than the amounts taken from their paychecks to pay back increasingly expensive student loan debts. We have gotten to this place by not adequately addressing how we finance higher education and treating a college degree as though it isn't an investment for the collective public good of our country. Education is a ladder to economic opportunity but for far too many Americans the opportunity is coming at too great a cost.”