WASHINGTON, D.C. — Today, U.S. Sen. Sherrod Brown (D-OH) voted for an amendment that would cap student interest rates at their current rates, but voted against a proposal that would hurt low and middle-income students in the long term by allowing future interest rates in excess of 10 percent while the government continues to profit. Following his vote, Brown offered the following statement:

“This bill permits the government to reap profits at the expense of students from middle and working class families,” Brown said. “When everyone is benefiting from student loan policy except students and graduates, we have a problem. This bill might be a good deal for today’s students in the short-term, but after two years, graduate borrower rates will begin to exceed current rates, followed by the undergraduates the next year. This means that the government will continue to make an additional profit off the backs of low and middle-income students and their families. We need to find an affordable solution that is student-focused and continues to open the door of education and opportunity to all Americans.”

Brown cosponsored a key amendment introduced by U.S. Sens. Jack Reed (D-RI) and Elizabeth Warren (D-MA) that would lock in reasonable caps of 6.8 percent for undergraduate and graduate loans, and 7.9 percent for PLUS loans, ensuring they wouldn’t rise above their current rates.

Brown, however, voted against the final bill which was debated by the Senate this week, which is projected to increase graduate borrower rates higher than their current levels by as soon as 2015, with undergraduate interest rates rising above current rates as soon at 2017.

If this new agreement is signed into law, by the year 2018, an undergraduate who takes out the maximum in subsidized and unsubsidized Stafford loans will pay more than $5,400 more over the life of the loan than they would have last year. Further, by 2018, graduate students who have $50,000 in student loans will pay more than $6,300 more over the life of the loan than if Congress did nothing at all.

All the while, the Congressional Budget Office (CBO) has said that the government will make $184 billion over ten years under current law. Under the new legislation, the government would generate an additional $715 million in profits on the backs of student borrowers.

Brown is a co-sponsor of the Student Loan Affordability Act, legislation that would have maintained the previous interest rate for federally-subsidized Stafford loans, which was set at 3.4 percent, and prevented its hike to 6.8 percent on July 1.

Brown also introduced the Refinancing Education Funding to Invest (REFI) for the Future Act, legislation that would help Americans saddled with costly, private student loans refinance to more affordable options at no cost to taxpayers. 

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