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Dear Jim,
You may have heard that Congress passed legislation that delayed for one year the doubling of interest rates on federally
subsidized student loans.
Although Congress didn't pass the indefinite extension of lower student interest rates that over 284,000 CREDO Action members
pushed for with petitions, calls and letters to the editor, it did pass legislation that delayed for one year the doubling
of interest rates on federally subsidized student loans.1 Many of our progressive allies2 joined this
fight, and no doubt it was thanks to all of our activism that Congress did anything at all to stop federal student loan rates
from doubling.
This was a step in the right direction, as it provided millions of
America's working-class students and their families much-needed
immediate relief, making sure they are not going to incur additional
financial stress in the current fragile economy.
But unfortunately, we haven't even started to make a dent in the student loan crisis — we merely stopped Republicans
from making it much worse. Since 1999, the average student loan debt has increased by 511 percent. 3 That's 511
percent in just 13 years!
There is a bill that would indefinitely set the federal student loan interest rate at 3.4 percent. It would ensure that
students pay their fair share while partially forgiving federal student debt for those hardworking American taxpayers who
have already paid 10 percent of their discretionary income for 10 years. And because massive student loan debt suppresses
economic growth by prohibiting many college graduates from starting a business, buying a home or starting a family, the bill
would also provide much-needed stimulus for the economy.4
The Student Loan Forgiveness Act would make student loan repayment both simple and fair by capping federal student loan interest
rates, converting private student loan debt into federal loan programs, and allowing forgiveness of federal student debt
of those graduates who have paid at least 10 percent of their discretionary income for 10 years.5
We bailed out the big banks and we think it's time for at least a partial bailout of students and their families who suffer
under crushing student debt. Partially forgiving debt, reducing loan repayment burdens, and cutting fees and interest rates
for those who qualify under the Student Loan Forgiveness Act would increase the purchasing power of millions of Americans
and help stimulate the economy.
However, this won't be easy. In order to have a shot at passing real reform of the student loan system, we need support from
the Democratic Leadership to build momentum for the Student Loan Forgiveness Act.
The short-term extension of low interest rates on federally subsidized
student loans was a welcome move, but it is the equivalent
of putting a band-aid on a massive head wound. Settling for a mere
one-year extension means that we will be right back where
we started next spring, as a deadline looms for doubling the interest
rates on federal student loans. To make matters worse,
we will have neither the leverage of voter outrage in an election year
to force extremist Republicans to the negotiating
table nor the promise of a strong youth vote turnout to motivate
Democrats to stand up and fight for the real reform our
country needs.
If the Democrats in Washington are serious about advancing a long-term solution to our student loan crisis and ending what
has been called "modern-day indentured servitude,"6 they need to embrace real solutions like the Student Loan
Forgiveness Act, which frees students who have paid their fair share from the increasingly outrageous burden of student debt
and helps stimulate the economy at the same time.
Let's speak up on behalf of our students, graduates and their families today. Click below to automatically sign the petition
to the Democratic Leadership urging them to support the Student Loan Forgiveness Act.
Thank you for speaking out.
Murshed Zaheed, Deputy Political Director
CREDO Action from Working Assets
1. Annamaria Andriotis, "Does the New Student-Loan
Legislation Go Far Enough?," The Wall Street Journal, June 29, 2012.
2. Student PIRGs, MoveOn, Rebuild the Dream and many other groups rallied Congress to stop federal student loan rates from doubling July 1, 2012. 3. David Indiviglio, "Chart of the Day: Student Loans have grown 511% since 1999," The Atlantic.com, August 18, 2011. 4. Isaac Bowers, "Learn What the Student Loan Forgiveness Act Could Mean for You," USNews.com, March 21, 2012. 5. Ibid. 6. Mike Konczal, "Student Loans are the New Indentured Servitude," The Atlantic.com, October 12, 2009.
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