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Student Debt Debate: The Countdown Begins

Whitney McFadden
AMSA National Policy Coordinator

There is a current stalemate regarding legislation (S 2343, HR 4628) that would avoid the doubling of interest rates on federally subsidized Stafford loans for undergraduate students, set to take place on July 1 if a compromise is not reached. While both the Democratic-led Senate and the Republican-led House of Representatives have come up with fixes, they have yet to come up with a consensus about the source of funding.

http://media.salon.com/2012/04/student_debt_final-460x307.jpg Most recently, the GOP has created a new set of proposals to offset the $6 billion cost of maintaining the interest rate reduction. One proposal plans to offset the costs of student loans by increasing the amount of money federal employees pay for their retirement. Another option has the money coming from multiple sources that include: a shorter period in which part time students are eligible for federal subsidized loans, taxes on healthcare providers that would restrict states’ ability have federally matched payments of Medicaid, and a reduction in social security overpayments. These are all unacceptable options, either limiting students education choices, decreasing already inadequate Medicaid funding from the federal government, or cutting Social Security. S 2343, Stop the Student Loan Interest Rate Hike Act of 2012, funds the interest rate by ending a tax break for S corporations, maintaining interest rates without sacrificing students, seniors, or the health care system. Senate Dems have since proposed more alternatives as well - one would raise insurance premiums on employers with underfunded pensions the other would reduce the tax reductions businesses receive for employer pension contributions. This debate is ongoing and July 1 is now just days away.

What can you do? Take action to keep student debt low and education accessible without compromising programs that provide necessary healthcare to our communities.
Contact your Members of Congress TODAY!

Here are some helpful articles that give more details about the current debate:

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