Proposal Would Save Students Up to $1,413 Over the Life of Their Loan; Save Taxpayers $4 Billion Over Next Decade 

WASHINGTON – The American Action Forum (AAF) released a new study today examining the student loan proposal in the House of Representatives to transition to market-based interest rates. The study found that switching to market-based interest rates, would save students up to $1,413 over the life of their loan and would reduce the deficit by nearly $4 billion over the next ten years.

The authors, Scott Fleming and Chad Miller, write that “Shifting to market based rates would provide a long-term solution to the borrower interest rate issue, eliminating the need for annual fixes. In the process, such a change in policy would:

·        “Reduce interest rates for all borrowers –saving students as much as $1,413;

·        “Save taxpayers $4 billion over the next decade;

·        “Remove federal bureaucrats from setting interest rates.”

This paper makes clear that transitioning to a market-based loan structure the most cost-effective solution for both students and taxpayers.

Read the complete paper online here.

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