Gillibrand explains her 'no' vote on student loan compromise

Jul 30, 2013

New York Sen. Kirsten Gillibrand says she voted against a recent compromise on student loans because the interest rates shouldn’t be tied to market rates.

Congress let interest rates on government subsidized student loans double on July first to nearly seven percent. Last week lawmakers worked out a deal to allow rates to be tied to 10 year Treasury notes. That temporarily lowered the rates again.

Gillibrand, a Democrat, says the deal was the wrong result for students in the long term.

"They will be laden with debt that they cannot afford," she said Monday during a stop in Syracuse. "They may have to postpone having children, buying a home, starting a business."

While back below four percent for now, student loan rates will now rise and fall with the economy – like home or auto loans.

That could allow undergraduate loans to rise to as much 8.25 percent before a cap kicks in. Gillibrand says students should be able to refinance their loans to get better rates, as with home or auto loans.

"Frankly, I don’t think the U.S. government should be making money off the backs of our students," she said.