Washington, D.C. –Representative Reid Ribble (WI-08) today voted to pass H.R. 4628, Interest Rate Reduction Act, which amends the Higher Education Act of 1965 to keep the Stafford loan rates to undergraduate students from an automatic rate increase scheduled for July 1, 2012 of this year. 

“This bill is important because it will lessen the burden of skyrocketing student loans on college students and their families,” said Ribble. “It’s absurd that while banks are getting money from the government at basically zero percent interest, struggling college students and working families would be charged rates nearly 30 times that amount.

“College tuition costs have escalated at an astonishing pace and now students are borrowing at twice the rate that they did 10 years ago, putting undue financial pressure on students. This legislation will help alleviate the weight of student loans on undergraduates and give them the breathing room they need to focus on their school work.”

H.R. 4628 would prevent interest rates on new federally subsidized loans for undergraduate students from increasing from 3.4 percent to 6.8 percent.  The 3.4 percent rate would be extended for one year. 

The cost of the one year extension is $5.985 billion which will be paid for by repealing the unobligated balance of the “Prevention and Public Health Fund,” a slush fund in the Health Care Reform law.  Repealing this fund will save $12 billion.  The remaining $6 billion will go towards deficit reduction. 

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