With nearly 400,000 Pennsylvania students set to lose an average of $956 if Congress doesn't act to prevent a significant rate hike on student loans, U.S. Senator Bob Casey (D-PA), today called on Congress to come together to prevent the rate hike. If Congress doesn't act, interest rates on federally subsidized student loans will double from 3.4% to 6.8% on July 1st.
"Congress needs to come together in a bipartisan fashion to prevent this significant rate hike on student loans before July 1st," Senator Casey said. "Doubling the rate for federally subsidized college loans would be bad for students and families and could have a serious impact on the economy. With the cost of higher education rising, it's important that Congress stake steps to prevent this rate hike. I'm hopeful that Democrats and Republicans can reach consensus on this issue."
The College Cost Reduction and Access Act of 2007 cut the fixed interest rates on subsidized Stafford loans for undergraduate students to 3.4 percent over a set period of time, but the interest rates on any new subsidized Stafford loans will double to 6.8 percent on July 1, 2013 unless Congress takes action. The rate increase would not apply to loans that are currently in repayment or that have already been disbursed, but students still attending or entering school after July 1st that need to take out federally-subsidized Stafford loans would pay higher rates on new loans, adding even more to their existing debt load.
Across Pennsylvania college students and families benefit from the current interest rate. Doubling the current loan rate from 3.4% to 6.8% would impacting nearly 400,000 Pennsylvania students and costing them an average of $956 each. Statewide and school by school data can be found in the related files section on the right.