In the News

Hudson Valley Congressman Mike Lawler (R, NY-17) has introduced legislation that will lower the interest rate on federal student loans from 3.5 percent to one percent.

The Affordable Loans for Students Act will retroactively apply the interest rate adjustment to outstanding loans while authorizing the Department of Education to modify the interest rate and refinance student loans automatically, without any opt-in from borrowers. Borrowers may opt out of refinancing if they choose.

If approved and signed into law, the legislation would also provide for the refinancing of other student loans to Part D loans to ease the rate adjustment process while at the same time authorizing borrowers to consolidate loans if they have multiple outstanding Part D loans following this change.

“Nowhere have costs skyrocketed more than in higher education. Sadly, with high interest rates, making even a dent in the principal balance can be a challenge,” said Lawler. “The Affordable Loans for Students Act will make higher education easier to access and student loans easier to pay back, instilling confidence in the affordability of college for all borrowers.”

Karen McCarthy, vice president of Public Policy at the National Association of Student Financial Aid Administrators, said her group has endorsed the legislation. “By making it easier to access and repay federal student loans, the bill would make college more affordable for all borrowers and help address the unconscionable debt burden carried by too many students and graduates.”