Will College Student Loan Rates Double?
An imminent interest rate hike on federally-subsidized Stafford Loans issued after July 1, 2012 would affect student borrowers and universities. The rates are set to double from 3.4 percent to 6.8 percent on July 1st unless Congress intervenes. Today, U.S. Senator Frank R. Lautenberg (D-NJ) visited Rutgers-Camden to push legislation that would prevent interest rates on the loans from doubling. The rate hike would impact more than 7.4 million undergraduate students with subsidized Stafford loans, including nearly 145,000 New Jersey students.
“Too many of New Jersey’s college students are burdened with heavy student loan debt, and the last thing they need is a doubling of interest rates that adds thousands to the cost of education,” says Lautenberg. “We must get rid of the obstacles that keep young people from getting the education they need to succeed, not put more in their way. I will continue working in Congress to stop this interest rate hike and ensure college is affordable for all students.”
Nationwide, student loan debt now totals more than $1 trillion, surpassing credit card debt. In New Jersey, 66 percent of all college students graduated with debt in 2010, and their average debt was $23,792. At Rutgers-Camden, 75 percent of students graduated with debt, and their average debt was $21,330.
Yesterday, U.S. Senator Bob Menendez (D-NJ) joined students and faculty from Montclair State University to discuss the interest rate hike.
“Keeping college affordable keeps America competitive. Instead of creating roadblocks for young Americans to seek higher education, we should be encouraging them and doing what we can to provide equal opportunities,” says Menendez. “Middle class families who want to send their children to college, but find themselves unable to pay skyrocketing tuition upfront and out-of-pocket should not pay more exponentially more for their education than those families who can and at a time when New Jersey students are struggling with high tuition costs, saddling them with higher loan repayments will only exacerbate the problem.”