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Dear FreedomWorks member,
As one of our million-plus FreedomWorks members nationwide, I urge you to contact your representative and ask him or her to vote NO on H.R. 4628, the Interest Rate Reduction Act. Introduced by Rep. Judy Biggert (R-IL), the bill would keep student loan rates at 3.4 percent instead of allowing them to rise to their 2007 level of 6.8 percent. The cost of keeping student loan interest rates low will cost taxpayers billions of dollars.
Congress originally lowered student loan interest rates to 3.4 percent in 2007. This was supposed to be a temporary reduction lasting only five years. Interest rates are not imaginary numbers the government makes up but meaningful pieces of information conveyed by the market. The Interest Rate Reduction Act would extend the subsidies for yet another year which will cost taxpayers $6 billion. It is interesting to note that the bill would be paid for by taking funds from ObamaCare’s Prevention and Public Health Fund. While this “slush fund” should be repealed, we support repealing the entire ObamaCare law and not just parts of it.
The rapidly rising cost of college is a major cause for concern. But these taxpayer subsidies will not reduce tuition costs. The opposite is likely true. Subsidizing student loans actually drives up the tuition cost for all students. Extending the subsidies for another year will also increase the likelihood that taxpayers will be on the hook for student loan defaults. The Interest Rate Reduction Act is bad policy that will cost taxpayers billions of dollars and make college even more expensive.
I urge you to call your representatives and ask them to vote NO on H.R. 4628, the Interest Rate Reduction Act. We will count their vote as a KEY VOTE when calculating the FreedomWorks Economic Freedom Scorecard for 2012. The Economic Freedom Scorecard is used to determine eligibility for the Jefferson Award, which recognizes members of Congress with voting records that support economic freedom.
President and CEO
[Click here to see a PDF version of this letter.]