Congress' Student Loan Fix Highlights Need for Alaska Rate Reduction
Today’s federal deal doesn’t lower burden of high-cost Alaska student loans
Today, after Congress passed a compromise plan to address federal student loan rates, Representative Les Gara (D-Anchorage) is encouraged that this could improve the chances of finding a way to reduce the high cost of Alaska student loans and help lower the costs of higher education and job training for Alaskans.
“Money shouldn’t be a barrier to success to people who want to get job skills, either in college or through job training, but Alaska student loan rates are as high as or higher than what the federal rates were before the fix,” said Gara. “I’m hopeful that if Congress can find a way to act on the federal side of this issue, even with all the dysfunction down there, that we can work together here to find a way to address the state side and lower the cost of student loans for Alaskans.”
According to the Consumer Financial Protection Bureau, student loan debt in America has become the second most crippling form of debt, after mortgages, and making students pay a higher rate than what they receive in salary increases creates a burden that threatens to suffocate success. While the deal that passed the U.S. House of Representatives today would tie federal student loan rates to the financial markets, the undergraduate rate would be 3.86 percent for loans for the upcoming school year. Over the past 5 years loan rates in Alaska have ranged between 6.5-7.5%.
Earlier this summer, Gara and Representative Geran Tarr (D-Anchorage) wrote their colleagues in the Alaska Legislature seeking their input and collaboration before the 2014 legislative session on ways to lower the cost of higher education and job training. In 2013, Gara, Tarr, and their Democratic colleagues pre-filed legislation (HB 17) that would lower the Alaska student loan debt for residents who stay in or return to Alaska to work.