Press Release
February 7, 2008
House Passes Interest Rate Relief on Student Loans for Servicemembers
Davis Amendment could save servicemembers up to $1,500 over 15 months
WASHINGTON – While servicemembers and members of the National Guard are serving in Iraq, Afghanistan and abroad, the interest on their student loans is piling up costing them up to $1,500 over 15 months. The House approved an amendment offered by Congresswoman Susan Davis (D-San Diego) to stop that interest from accruing when a servicemember goes on active duty.
The amendment, included in the reauthorization of the Higher Education Act, is based on a bill introduced by Davis (H.R. 3748). The amendment passed on voice vote.
“Military service requires those who serve our country to make tremendous sacrifices – personally, professionally, and financially,” said Rep. Davis, Chairwoman of the Military Personnel Subcommittee. “When our brave men and women deploy to Iraq and Afghanistan, the last thing they want to worry about is how they will be able to afford their student loans when they get back.”
Last July, Senator Evan Bayh (D-IN) introduced a similar bill, the Interest Relief Act, in the United States Senate.
“The principle behind this bill is very simple: When Americans go off to serve their country during time of war, the government should not charge interest on their federal student loans,” Senator Bayh said. “Our service men and women, and their families, are already putting so many aspects of their lives on hold during their deployment. This is one more way we can honor their sacrifice and ease their transition from active duty service. It is relief we can and should provide for our soldiers right now.”
Currently, active duty servicemembers are charged interest on their student loans while they are abroad defending our country. Last year, Congress passed legislation allowing servicemembers to get a deferment on their student loans while they are activated. But this deferment only applies to repayment of the principal and existing interest on these loans; it does not prevent new interest from accruing.
The Davis amendment will prohibit student loan interest from accruing for all servicemembers while they are on active duty up to a maximum of 60 months. This would save the average servicemember between $1,183 and $1,479 over the course of a 12-15 month activation period.
Congress is considering extending the programs under the Higher Education Act (HEA) through 2012. The College Opportunity and Affordability Act (H.R. 4137) reauthorizes the HEA to help students from low-income families afford a college education and provide federal aid to higher education institutions. H.R. 4137 was approved last night by the House by a vote of 354-58. The Senate passed its version (S. 1642) in July 2007.