Keeping Student Interest Rates Low
Taking out Stafford Loans to help pay for college?
On July 1, 2013 interest rates on many new federal student loans doubled. Because Congress failed to take action, a college education got a more expensive for millions of students and middle class families.
Sound familiar? That’s because we did this last summer. When interest rates were schedules to double last summer, students all over the country took to Facebook and Twitter, called on elected officials, and made their simple message heard: “Don’t Double My Rate.” Lawmakers took action and passed a bill to extend lower student loan interest rates until July 1, 2013, which President Obama signed it into law last year.
To stop rates from doubling this year, President Obama put forward a long-term solution that cuts rates this year on nearly all new loans, ensures that all students have access to affordable repayment options, and does not charge students higher interest rate to pay for deficit reduction. But Congress failed to take action on his proposal, and interest rates went up.
Now is not the time to make school more expensive for our young people. As our economy continues to recover – at a time when interest rates are at historic lows -- the 7 million students who rely on these loans to finance their education shouldn’t face higher debt as they work to graduate, start a career or buy a house.
“We cannot just cut our way to prosperity. Making it harder for our young people to afford higher education and earn their degrees is nothing more than cutting our own future off at the knees. Congress needs to keep interest rates on student loans from doubling, and they need to do it now.”
—President Barack Obama, April 21, 2012