Senator Kay Hagan (NC) announced today she has introduced legislation with Senator Jack Reed (RI) to keep student loan interest rates low. The current interest rate for subsidized Stafford loans is set to double on July 1st if Congress does not act, and the Keep Student Loans Affordable Act of 2013 Hagan is sponsoring will maintain the low interest rate for an additional year as Congress works on a long-term, sustainable solution for the federal student loan program.
"Students in North Carolina cannot afford more student loan debt, and they certainly cannot afford congressional inaction," said Senator Kay Hagan. "I refuse to sit on my hands while 176,000 North Carolina students and their families see interest rates double on their federal Stafford loans. I am hopeful we can work towards a long-term plan, but in the meantime I am committed to working with my colleagues - Democrats and Republicans - to pass this legislation and avoid putting one more burden on our students and middle class families who are trying to make ends meet."
If Congress does not act by July 1st, interest rates on Stafford loans will rise from 3.4 to 6.8 percent - effectively sticking 176,000 students in North Carolina with an extra $1,000 a year each in student loan costs. The Keep Student Loans Affordable Act of 2013 would set the interest rate for any subsidized Stafford loan made between July 1, 2013 and June 30, 2014 at the current rate of 3.4 percent. Stafford loans are need-based, with the majority of borrowers coming from families who make $60,000 or less a year.
"I have talked to families and students across North Carolina who cannot bear this burden, and I'm not willing to accept this fate for our students or our middle class families who are trying to do right by their children," added Hagan. "If we saddle our young people with unsustainable debt, it will be more difficult for them to buy homes or cars, start businesses, support families, or invent, innovate and otherwise contribute to growing our economy."