(Des Moines) – Iowa Senate lawmakers have passed a resolution calling on Congress to cap student loan interest rates.
The Senate this week passed SCR4, which calls on Congress to limit all federal student loan interest rates to no more than 2% above the federal prime interest rate. Senator Brad Zaun – a Republican from Urbandale – says the federal government shouldn’t be making money with students and families on student loans.
“We are trying to end predatory lending and our Congress from really taking advantage of our students,” Zaun said. “Just as a warning, at present, the direct subsidized loans and unsubsidized loans for undergraduates have an interest rate set at 5.05%. Direct unsubsidized loans for graduates are 6.6%. Direct plus loans, which are for parents, students, and graduates – and that’s what most parents and students use – is at 7.6%. “
The Institute for College Access & Success says Iowa ranks 21st in the country for average student loan debt.
“Right now, Iowa has an average student debt of $ 30,000 in 2019,” Zaun said. “63% of Iowa students graduate with debt. Student loan debt has soared to $ 1.51 trillion. Currently there is an 11% late rate. I just ask my colleagues , let’s send a message to Washington, DC Stop Making Money With Our Parents and Students and Colleges. “
At the federal level, Democratic lawmakers have called on the Biden administration to implement a blanket student loan cancellation at different levels, while the president has preferred Congress to be the one who cancels the debt.