Despite Looming Deadline, Congress Still Unsure What To Do About Student Loan Interest Rates
The total outstanding student loan debt in the United States has surpassed the $1 trillion mark. This particular debt burden now rests on the shoulders of 37 million Americans.
The deadline is fast approaching for Congress to make a decision on whether they will allow the interest rates on federally subsidized Stafford student loans to jump from 3.4 percent to 6.8 percent on July 1. If Congress does not act and the interest rate does increase, it will apply to all new loans, not loans that have already been taken out by students and graduates.
The reason why there haven’t been any monumental decisions made is because Congress is divided on the issue. According to Patriot News, some members of Congress want a complete overhaul of the student loan interest rate system that would switch the fixed-rate interest to an adjustable system that would follow market trends.
Then there are a handful of congressional representatives that merely think student loan interest rates aren’t that big of a deal.
Fortunately for students, there are many in Congress that DO think this is an issue worthy of attention. Senator Elizabeth Warren is one such member of Congress. In a recent meeting with the Senate, Sen. Warren took the time to address the student loan crisis facing our country at a time when students and graduates are expecting to see interest rates on federal loans double.
To combat the interest rate hikes, Sen. Warren, with the aid of Representative John Tierney, has recently introduced the Bank on Students Loan Fairness Act to the Senate. This bill would lower the interest rates on new Stafford loans down to 0.75 percent, the same percentage that the Federal Reserve pays on short-term loans.
Senator Warren is also a co-sponsor of the Student Loan Affordability Act, introduced by Senator Jack Reed, which would extend existing interest rates on subsidized Stafford loans for two years.
Without a doubt, high student loan interest rates are a huge problem facing our country. Student loan debt has now surpassed credit card and auto debt, and is second only to mortgage debt in the U.S.
Let your congressional representative know that we must address the student loan problem facing so many students throughout the United States. Increasing interest rates on student loans will only result in continued harm to the U.S. economy. Send this article to five of your friends and ask them to do the same!Email This Post