U.S. Senator Debbie Stabenow announced new legislation to keep student loan interest rates low through 2015. The legislation would maintain the current 3.4 percent interest rate on federal student loans through July 1, 2015. If Congress does not act, student loan rate will double to 6.8 percent on July 1, 2013.
"At a time when Michigan families are struggling to make ends meet, we need to be making college more affordable for students and their parents," said Stabenow. "When interest rates for most borrowing are at historic lows, it would be outrageous for Congress to increase interest rates for college students. Congress needs to come together and pass common-sense legislation that will stop student loan interest rates from doubling."
If interest rates double, the average student will have to pay an additional $1,000 in debt over the life of each of their loans. For the over 300,000 Michigan student borrowers who would see their loan rates go up, that would mean a total increase in cost of over $240 million. The average student debt for Michigan students is $25,675.
Senator Stabenow championed similar legislation in 2012 to keep the student loan interest rate at 3.4 percent. The President signed that bill to keep interest rates low for one year. The bill Senator Stabenow is cosponsoring today would keep interest rates low at 3.4% for an additional two years.
In 2010, Senator Stabenow led the effort to reform the student loan program and expand college access. These reforms made lending initiatives more efficient, reduced the deficit, and increased Pell Grant funding to make college more affordable for students and middle-class families.