Heidi Alexander: “Well, if you are 1 of the 11 million students who borrow money under the bipartisan proposal--let's say you are an…”

“Well, if you are 1 of the 11 million students who borrow money under the bipartisan proposal--let's say you are an undergraduate, and that is two-thirds of the loans--your rate would be 3.66 percent this year, next year, and for the next 10 years. Next year it will be whatever it costs the government to borrow money. The government will loan it to the student, without overcharging the student, in order to reduce the debt to pay for government programs or any other reason. So the formula would be that we would not add any cost to the taxpayers, but we would not overcharge the students to reduce the debt or to pay for a program. Next year the interest rate might be higher. The next year it might be higher. But those would be for new loans. Then, of course, there are already two caps in the law that would be continued under the bipartisan proposal. One says that any student at any time can consolidate his or her loan at 8.25 percent. So the loan cannot go higher than that. The second says while you are paying off your loan, you will not pay more than about 10 percent of your income. If after 20 years or so you have not paid off your loan, it is forgiven. So these are two caps that are already in the law.”