U.S. Senator Jack Reed (D-RI) and Congressman Joe Courtney (D-CT) today continued their push to prevent interest rates from doubling on subsidized Stafford student loans. In an effort to make student loans more affordable and help families pay for college, Reed and Courtney introduced the Student Loan Affordability Act (S.2051/ H.R.3826) to lock in the current rate of 3.4 percent, which is scheduled to double on July 1 -- 110 days from today.
At a press conference on the lawn of the U.S. Capitol, Reed and Courtney joined advocates from U.S. PIRG, Rebuild the Dream, Campus Progress, and college students from across the country in support of their legislation to prevent interest rates on certain student loans from doubling this year.
The current fixed interest rate on Stafford federal subsidized loans, held by nearly 8 million undergraduates, is 3.4 percent, but that rate will double to 6.8 percent on July 1, 2012 unless Congress takes action. That increase could mean an increase of about $5,000 over a 10-year repayment period for borrowers who rely most on federal student loans.
"A college education is an important investment for both individuals and America's global competitiveness. It is in our national interest to try and keep student loan rates low," said Senator Reed. "As the price of college continues to increase, more students are forced to take out bigger loans to pay for their education. Congress has a July 1st deadline to pass this legislation and help millions of students nationwide. I commend Congressman Courtney for his leadership on this issue, and I will continue working with him to prevent this rate hike."
"A college education is key to success in today's economy, but for many students, the spiraling costs of higher education are creating an immense barrier," said Congressman Courtney. "At a time when Americans owe more in student-loan debt than credit card debt, it is critical that we prevent interest rates from rising further. We cannot allow a de-facto tax increase on middle- and low-income families to exacerbate this problem, especially as we work to continue our economic recovery."
During the event, Samantha Durdock, who is currently a sophomore studying government and politics at the University of Maryland, shared her story, stating:
"I would like to start by thanking Senator Reed and Representative Courtney for introducing legislation to keep my student loan interest rates from doubling this summer.
"Like many undergraduate students today, I feel the pressures of rising college tuitions. My parents are divorced which has significantly impacted their ability to help me pay for my college education. On top of tight family finances, I have two sisters who are also around college age. My older sister, Kelly, will be graduating this year with a high amount of debt from student loans, and my younger sister, Kathleen, is beginning to apply to colleges. We all have to depend more on scholarships, loans and work to pay for a college education.
"I recognize the importance of a college degree to reaching my future career goals. This is why I have worked hard to attain scholarships, maintain a part-time job, and borrow loans to make up the difference.
"Currently, I have $8,000 in Subsidized Stafford loans and expect that to increase by another $15,000. Even though I am only a Sophomore I am worried about the amount of debt I will have at graduation. I have already started weighing options, like my ability to go right to graduate school after completing my undergraduate degree, but my situation will only get much worse if interest rates double this summer. I would be really worried about my ability to pay basic living expenses with what my monthly payments for my loans would increase to if rates increased."