If Congress fails to act, student loan interest rates will double in July
Washington, DC - Rep. Bruce Braley (IA-01) today urged House leaders to begin working immediately to pass legislation to stop the looming increase in federally subsidized student loan interest rates. Unless Congress acts, student loan interest rates will double to 6.8 percent on July 1, 2012.
Last month, Braley introduced a bill to indefinitely keep the interest rate for federally subsidized Stafford loans at their current rate of 3.4 percent.
"Iowa college graduates have the 3rd highest student debt load in the nation," Braley said. "Piling thousands of dollars more in debt on them puts Iowa students even further behind at graduation. Our colleges and universities are avenues of economic opportunity, and we need to keep higher education affordable for every person who wants to attend.
"That's why I'm urging House leaders to begin working now to pass legislation keeping student loan rates low. After witnessing the debacle over extending the middle class tax cut, we don't need college affordability to devolve into another down-to-the-wire partisan shouting match."
Braley made the request in a letter to House Speaker John Boehner and Minority Leader Nancy Pelosi, which can be read below and downloaded at the following link: http://go.usa.gov/QrW
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February 7, 2012
The Honorable John Boehner
Speaker
U.S. House of Representatives
H-232, U.S. Capitol
Washington, DC 20515
The Honorable Nancy Pelosi
Minority Leader
U.S. House of Representatives
H-204, U.S. Capitol
Washington, DC 20515
Dear Speaker Boehner and Minority Leader Pelosi:
As you may know, interest rates on subsidized Stafford loans are scheduled to double on July 1st, 2012, unless congressional action is taken. Please work together to pass legislation to prevent this drastic increase.
Currently, the interest rate for subsidized Stafford loans is set at 3.4%, as a result of legislation passed into law in 2007. If this provision expires, then interest rates on subsidized Stafford loans will double to 6.8% on July 1st. This increase would add tens of thousands of dollars in extra cost for students trying to pay for college. For example, a student taking out the maximum $23,000 in subsidized student loans would see an increase of $5,200 over a 10-year repayment period and $11,300 over a 20-year repayment period.
As college tuition continues to drastically rise, students cannot afford thousands of more dollars in bills because Congress failed to act. After witnessing the debacle that occurred over the payroll tax extension, I would hate to see a similar scenario occur with this issue. Please pass legislation to prevent an increase in student loan interest rates before July 1st. I stand ready to work in any way possible to make sure we keep student loan interest rates at their current level.
Sincerely,
Bruce L. Braley
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