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Fox 44, ABC 22 - Stafford Student Loan Interest Rates Set to Double July 1st

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Location: Unknown

By Jenny Day

It seems like the college degree is the new high school diploma... a requirement for a lot of jobs these days. But the price tag on higher education is mighty high. Vermont's Congressman is trying to ease the pain.

In just a few months, student loan rates are set to double.

Congressman Peter Welch was talking with students in Rutland today, about their struggles.

Greg Lambert's story is all too common. He works, is a single parent and goes to the community college of Vermont in Rutland.

"I am absolutely using student loans, without them I would not be able to go to school," Lambert said.

But without a degree, Lambert wouldn't be able to pursue his environmental science dream. So forking over the dough is almost mandatory.

"Without that, you're not marketable," Lambert said.

And like Lambert, thousands of other Vermonters rely on student loans as well. Right now, the Stafford loan has a 3.4 percent interest rate. It's set to double July first. That could mean about a thousand dollars more a year.

"A thousand dollars is a fairly significant portion of my income, so yea, it would create many hardships," Lambert said.

Congressman Peter Welch listened to students today, but Welch says the sequester is to blame... millions could be cut to education.

"Exhibit A of congressional dysfunction, 100 percent of the members of congress are against it, and yet it's being implemented," Congressman Welch said.

Welch says putting a halt on the proposed rate hike is essential for the future of our country.

"Their goal is to get into the middle class and be contributing members of our community and we're making it tough on them," Congressman Welch said.

Students understand the importance of getting an education, but don't want to be penalized for doing so. In Vermont, the average college graduate is $28,000 in debt.

These same federal loans were scheduled to increase last July, but Welch fought to block it, and was successful. We'll see about this year.

One interesting fact on how bad student loan debt is, according to the Federal Reserve, Americans owe 870 billion dollars. That's more than all credit card and auto loan debt.

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