Congresswoman Suzan DelBene co-sponsored legislation this week to maintain low interest rates on subsidized Stafford student loans, which are set to double in July unless Congress takes action.
In 2007, Congress passed the College Cost Reduction and Access Act, lowering the student loan rates from 6.8 percent to 3.4 percent over a four-year period and easing the burden on thousands of students and families. The lower interest rate was extended for one year in 2012, and is now set to expire on July 1, 2013. Allowing the interest rate to double will cost students and their families thousands of dollars, imposing considerable financial barriers on young people as they enter the workforce.
The bill DelBene is co-sponsoring would eliminate the existing sunset and maintain the low interest rate for two years, providing Congress time to work on a long-term solution to slow the rapid accumulation of student-loan debt.
"Ensuring everyone has access to a great education is how we expand economic opportunity. A big obstacle to this is the rising level of debt our students are collecting," said DelBene. "This bill will help keep costs down for students and families who simply cannot afford another increase in the cost of education."
According to the non-partisan U.S. PIRG, if Congress does nothing, borrowers who will take out the maximum $23,000 in subsidized student loans will see their interest balloon to an additional $5,200 over a 10-year repayment period and $11,300 over a 20-year repayment period.