The interest rates on federal student loans will double this summer if Congress doesn’t take action.
Millions of American students from working class families are able to get a college education thanks to low-interest federal student loans. Congress is putting those loans in jeopardy when students can least afford to pay higher interest rates.
In 2007, Congress passed the College Cost Reduction and Access Act. It reduced the interest rates on subsidized Stafford loans from 6.8% to 3.4%. Republican leadership in the House is planning to let this legislation expire on July 1, doubling the interest rates on these loans. This will result in an average of $5,000 in added payments for students scheduled to pay their loans back in five years, and $11,000 for those who are paying back in ten.
We need leadership from the Senate. We need Senate Majority Leader Harry Reid to stand up and fight for millions of American students. Urge Senate Majority Leader Harry Reid to stop Republicans from doubling the interest rate on student loans.
If Senator Reid leads the Democratic-controlled Senate to pass legislation that ensures the interest rates remain fixed at 3.4%, it will force the hand of Congressional Republicans to pass the measure or go on the record as the party fighting against the interest of millions of America’s working class students and their families.
Federal student loans with low interest rates, such as the subsidized Stafford loan, are designed to help students whose families make under $40,000 a year. These loans help the neediest students, who are often not eligible to receive Pell Grants. Adding further financial stress on these students and their families by letting the interest rates double this July would be devastating.
It’s worth noting, as well, that many of the big banks that make a killing on private student loans and still have billions of government-subsidized student debt on their books, are able to borrow money from the government through the Federal Reserve’s discount window at nearly no interest at all. Why, then, are young people, who aren’t guilty of trashing the economy but remain the victims of a rate of unemployment nearly twice that of the rest of the population, expected to pay more?
Click here to automatically sign the petition urging Senator Reid to fight to keep college education affordable and not let the interest rate double on federal student loans.
Thanks to Is Congress Going to Double the Interest on Your Student Loan?, Rising Concerns Over Student Loans, Public and Private, and Vermont Senators Leahy And Sanders Join Bill To Prevent July Interest Rate Increase On Stafford Student Loans.