Legislation co-sponsored by U.S. Senator Debbie Stabenow to keep student loan interest rates low through 2015 was blocked today by a Republican filibuster. The legislation would have maintained 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, not more expensive," said Stabenow. "It is outrageous that the actions of a minority of Senators could lead to doubling students' interest rates and put the dream of a college education out of reach for millions of Americans."
If the interest rate doubles, the average student will rack up an additional $1,000 in debt over the life of each of their loans. For the nearly 300,000 Michigan student borrowers who would see their loan rates go up, that would mean a total increase in cost of over $260 million. The average student debt for Michigan's college graduates is $24,450.
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.