Congressman Mark S. Critz (PA-12) announced today that he is a cosponsor of legislation to stop student loan interest rates from doubling later this year. In 2007, Congress passed the College Cost Reduction and Access Act, which reduced the fixed rate on subsidized Stafford loans for undergraduate students from 6.8% to 3.4% over a four year period. Without Congressional action, rates will return to 6.8% on July 1, 2012.
"Coming from a family of educators, I have always believed that we must promote an educational system that affords all students the opportunities of higher education and career training programs," said Congressman Critz. "At a time of ever-increasing education costs, and the challenging job market graduates face, we cannot let interest rates on federal Stafford loans double this year and cost students and families thousands of extra dollars."
The legislation Critz is a cosponsor of, H.R. 3826, will prevent subsidized Stafford student loan rates from doubling from 3.4% to 6.8% by extending the 3.4% interest rate for these loans. In order to receive a subsidized Stafford Loan, you must demonstrate financial need. About two thirds of subsidized Stafford loans are awarded to students with families making under $50,000; one fourth to students with families making $50,000 to $100,000; and a little less than 10% to students with families making over $100,000. This issue also cuts across age groups impacting students, parents and even grandparents, many of whom cosign loan notes that students take out.
Earlier this year, President Obama called on Congress to prevent this doubling of student loan rates. "We must take action to protect middle class families and their children from higher loan rates during this challenging economic time," added Congressman Critz.