Interest rates on new subsidized Stafford student loans will double to 6.8 percent if Congress doesn’t extend a cap that has helped make the loans more affordable.
The Senate is expected to vote in the coming weeks on legislation to keep the current 3.4 percent interest rate in place. An estimated 7.4 million borrowers will face higher interest rates on new subsidized Stafford student loans beginning in July if Congress doesn’t extend the cap. Consumers Union, the policy and advocacy arm of Consumer Reports, urged lawmakers today to pass the legislation.
Suzanne Martindale, staff attorney for Consumers Union, said students and their parents are already struggling to keep up with the runaway costs of paying for college.
Now is not the time to pile thousands of dollars in more debt on their backs by allowing student loan interest rates to double. Keeping interest rates low will help students afford the education they need to stay competitive in today’s tough job market.
On average, students graduate with $25,000 in debt, and at over $1 trillion overall, student loan debt has surpassed credit card debt in the U.S. Why so much debt? See our recent report for more, including how to avoid borrowing, and digging out of student debt.
“Congress should invest in our future and side with students and their families by extending the interest rate cap,” said Martindale.