Education And Workforce Democrats Lead Fight To Preserve Subsidized Stafford Loans

WASHINGTON, DC —Today Representatives Joe Courtney (CT-02), Bobby Scott (VA-03), ranking member of the House Education and the Workforce Committee, Susan A. Davis (CA-53), ranking member of the Subcommittee on Higher Education and Workforce Development, and Donald Norcross (NJ-01), led nearly 50 members of the Democratic Caucus on a letter to the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies on President Trump's proposed budget. The members are asking that the subcommittee reject the proposal in the President's Fiscal Year (FY) 2018 budget to eliminate subsidized Stafford Loans within the Department of Education budget.

"With the cost of a college education and the debt needed to afford it growing every year, Americans are demanding action to lower the crushing cost of higher education. Unfortunately, the President's Fiscal Year (FY) 2018 budget proposal would make college more expensive," wrote the members. "As you know, subsidized student loans are utilized by low-income undergraduate students, many of whom would not otherwise be able to attend an institution of higher education. In fact, in the last school year, over six million students borrowed through this program. Subsidized student loans allow a student to earn a degree without needing to burden themselves with the crushing costs of student loan interest rates. We owe it to the next generation of college students to push for student loan policies that will not hold them back.

"Despite these facts, the Administration remains willing to remove this important source of financial aid for America's neediest college-bound students using a fact-free justification. Student debt is a drag not just on a student, graduate, or their family; it's a drag on our entire economy that impacts when – or if – a borrower can buy a home, start a family, get a business off the ground, or change careers. To divert resources from students who need it most, our nation is only perpetuating our student debt crisis."

The President's Fiscal Year (FY) 2018 budget proposes phasing out the subsidized Stafford Loans program that subsidizes interest on Stafford Loans for students while enrolled in school and for six months after leaving school. For a student taking out the maximum loan amount, ending this program means they would owe an additional $5,700 in interest when entering loan repayment. Over the next decade, this phase-out will cost students and families $39 billion.

In 2015, 70% of college seniors graduated with debt. Moreover, more than one in four borrowers will enter into delinquency or default on their student loans. According to a recent analysis, a quarter of borrowers default over the life of their loans. With interest rates scheduled to rise again this summer, it is clear that the student debt loan crisis shows no sign of slowing down. This is why Congress must address student loan debt and reject President Trump's budget cuts.

The full letter can be viewed online or below:

June 6, 2017

The Honorable Tom Cole The Honorable Rosa DeLauro
Chairman Ranking Member

Subcommittee on Labor, Health and Human Subcommittee on Labor, Health and Human

Services, Education and Related Agencies Services, Education and Related Agencies

Committee on Appropriations Committee on Appropriations
U.S. House of Representatives U.S. House of Representatives

Washington, DC 20515 Washington, DC 20515

Dear Chairman Cole and Ranking Member DeLauro:

With the cost of a college education and the debt needed to afford it growing every year, Americans are demanding action to lower the crushing cost of higher education. Unfortunately, the President's Fiscal Year (FY) 2018 budget proposal would make college more expensive. As you continue to develop your FY 2018 Labor, Health and Human Services, Education and Related Agencies appropriations bill, we write to express our strong opposition to the Administration's proposed elimination of subsidized Stafford Loans within the Department of Education budget.

As you know, subsidized student loans are utilized by low-income undergraduate students, many of whom would not otherwise be able to attend an institution of higher education. In fact, in the last school year, over six million students borrowed through this program. Subsidized student loans allow a student to earn a degree without needing to burden themselves with the crushing costs of student loan interest rates. We owe it to the next generation of college students to push for student loan policies that will not hold them back.

In the justification for phasing out subsidized loan programs in the 2018 Major Savings and Reforms document, the Office of Management and Budget states "in-school interest subsidy has not been rigorously evaluated." Yet, the subsidized Stafford Loan program has proven to make college more affordable for low-income students. Ending the availability of this loan will increase college costs by thousands of dollars per student borrower. By removing the interest subsidy for Stafford Loans, a student taking out the maximum loan would likely owe an additional $5,700 in interest when entering loan repayment. Over the next decade, phasing out the subsidized Student Loan program alone would cost students and families across the country $39 billion.

Despite these facts, the Administration remains willing to remove this important source of financial aid from America's neediest college-bound students using a fact-free justification. Student debt is a drag not just on a student, graduate, or their family; it's a drag on our entire economy that impacts when – or if – a borrower can buy a home, start a family, get a business off the ground, or change careers. To divert resources from students who need it most, our nation is only perpetuating our student debt crisis.

Every student deserves access to an excellent education and the subsidized Stafford Loan program is an essential part of achieving the college dream for millions of Americans. We therefore urge the subcommittee to maintain the subsidized Stafford Loan program in the FY 2018 appropriations bill and thank you for your continued support for higher education programs.

Sincerely,

REP. JOE COURTNEY

REP. ROBERT C. "BOBBY" SCOTT

REP. SUSAN DAVIS

REP. DONALD NORCROSS

REP. ALMA S. ADAMS

REP. EARL BLUMENAUER

REP. LISA BLUNT ROCHESTER

REP. SUZANNE BONAMICI

REP. BRENDAN F. BOYLE

REP. JULIA BROWNLEY

REP. SALUD O. CARBAJAL

REP. ANDRE CARSON

REP. KATHY CASTOR

REP. JUDY CHU

REP. DAVID N. CICILLINE

REP. YVETTE D. CLARKE

REP. EMANUEL CLEAVER, II

REP. STEVE COHEN

REP. SUZAN DELBENE

REP. MARK DESAULNIER

REP. ANNA G. ESHOO

REP. ADRIANO ESPAILLAT

REP. DWIGHT EVANS

REP. RAUL M. GRIJALVA

REP. ALCEE L. HASTINGS

REP. PRAMILA JAYAPAL

REP. WILLIAM R. KEATING

REP. RON KIND

REP. JAMES R. LANGEVIN

REP. JOHN B. LARSON

REP. ALAN LOWENTHAL

REP. STEPHEN F. LYNCH

REP. SEAN PATRICK MALONEY

REP. A. DONALD MCEACHIN

REP. JAMES P. MCGOVERN

REP. FRANK PALLONE, JR.

REP. JAMIE RASKIN

REP. GREGORIO KILILI CAMACHO SABLAN

REP. TERRI SEWELL

REP. CAROL SHEA-PORTER

REP. JACKIE SPEIER

REP. ERIC SWALWELL

REP. MARK TAKANO

REP. DINA TITUS

REP. JUAN VARGAS

REP. NYDIA M. VELÁZQUEZ

REP. PETER WELCH

REP. FREDERICA S. WILSON