Baldwin Implores Congress To Cap Student Loan Interest Rates

Sen. Tammy Baldwin, D-Wisconsin, is calling on Congress to act quickly to cap student loan interest rates.

Interest rates on new federal Stafford Loans doubled on Monday from 3.4 percent to 6.8 percent, after lawmakers failed to reach a deal before they went on recess for the July 4 holiday. Baldwin was at University of Wisconsin-Madison today, pushing a bill she’s co-sponsoring that would freeze rates at 3.4 percent for another year.

Baldwin: “That doubling of the interest rate impacts 163,000 Wisconsin students over the lifetime of their Stafford Loans. It will be $1,000 more out of their pockets … that probably won’t ripple through out state economy.”

UW-Madison environmental studies senior Mariella Treleven spoke at the event in favor of capping rates. Treleven says when she completes her degree next year, she’ll carry over $40,000 in student loan debt.

Treleven: “It’s extremely stressful to know that six months after I graduate, I’m going to start to be billed for my student loans. [It] puts the pressure on to get out there and find a job.”

The Senate is expected to vote July 10 on whether to take up a bill to freeze interest rates. While Baldwin and other Democrats want to cap student loan interest at the previous rate of 3.4 percent, House Republicans support variable interest rates that are linked to the government’s cost of borrowing.

The Republican’s bill is estimated to save the government $3.7 billion over a decade. Baldwin says her plan would be paid for by closing a tax loophole on retirement accounts, which would save $4.6 billion over 10 years.