Scott rips Congress for student loan hikeby John Kennedy | July 1st, 2013
Gov. Rick Scott ripped Congress for allowing interest rates on some federal student loans to double Monday, saying it was “irresponsible” for lawmakers to go on July 4 recess without reaching a compromise.
“Doubling the interest rate on federal college loans effectively kills the chance for many Florida families to live the American Dream,” Scott said. “This is equivalent to a $936 tax on Florida families per loan each year.
He added, “As I call for Florida’s colleges and universities to hold the line on tuition, Washington bureaucrats must come back to work together on behalf of Florida’s families and students.”
About 7.4 million university students effectively saw rates on their federal Stafford loans jump to 6.8 percent from 3.4 percent on Monday, after the Senate was unable to reach agreement on extending the lower rate. The Obama administration and most Democrats had been expecting more fiscally conservative Republican leaders to abandon the student loan standoff had they had last year, when they agreed to continue 3.4 percent rate another year.
The interest rate difference will add an extra $2,600 cost per-student, analysts said. About one-quarter of all federal student loans are affected.
Although Scott allowed tuition to climb in Florida his first two years as governor, this spring he vetoed a 3 percent college and university tuition hike approved by state lawmakers. He then lobbied schools and the State University System’s Board of Governors to work to reject a 1.7 percent cost-of-living increase that automatically kicked in, although only Florida Atlantic University and Florida Gulf Coast University agreed to offset the boost.
“Florida’s students and families now face higher education costs because Washington bureaucrats were unable to work together on behalf of America’s students,” Scott said. “Fewer students will now be able to attend college and get jobs that require
degrees because Washington chose politics over our families.”
Lawmakers, however, have said they can return the interest rates to 3.4 percent when they return after the July 4 holiday. The Republican-led House passed a bill before leaving town tying student loan interest rates to the financial markets, but the Democratic-controlled Senate was ensnared in a procedural matter that halted action.
A study released last year showed 49 percent of Florida public university graduates owed money when they finished school.
The average $21,184 debt for Florida students in 2010 was below the $25,250 national average, according to the Project on Student Debt by the Institute for College Access & Success.
Florida ranked 42nd among states in the percentage of students graduating with debt.