On Wednesday, Congressman Andrews announced that interest rates on federally backed student loans will return to their low rate for the foreseeable future. The interest rate on student loans had doubled at the beginning of July from 3.4% to 6.8%, making the mountain of debt facing today's college students that much worse. Congressman Andrews, who has been a leading voice for lowering costs for students, championed a bill in Congress that came just in time to stop the doubling of interest payments on student loans.
Once the legislation is signed into law, interest rates on federally backed student loans will be set annually using the value of the 10-year Treasury note. Previously Congress had to vote to set an arbitrary rate for an arbitrary amount of time, which resulted in rates doubling and leaving already cash-strapped college students on the hook for the increase. This law will actually allow the rate to shrink below the previously low rate of 3.4%. Also, although the law was passed on July 31, 2013, the interest rate will be lowered retroactively back to July 1st when the original low rate expired, meaning that any interest that accrued on any student loans from July 1st on will be calculated at this new lower rate.
"Keeping the student loan interest rates from doubling will save New Jersey families more than $135 million," said Congressman Andrews. "It's hard enough for the middle class to make it in this economy without unnecessary interest rate hikes on our college students and that's why I'm glad we were able to get this done."
As a member of the House Education and the Workforce Committee, Congressman Andrews will continue working to make sure that the residents of South Jersey have the opportunity to better themselves at America's colleges and universities.