WASHINGTON — Millions of college students could be in for a shock this summer when the interest rate on a popular federally subsidized student loan doubles unless Congress acts.
College students Tuesday delivered more than 130,000 letters to congressional leaders asking them to stop a rate increase from 3.4 percent to 6.8 percent. The rate hike affects new subsidized Stafford loans, which are issued to low- and middle-income undergraduates. They hope to raise enough awareness to get Congress to stop it.
Tyler Dowden, an 18-year-old freshman at Northern Arizona University who spoke at a news conference outside the Capitol, said he anticipates graduating with $25,000 in debt, but if the rate increases, he expects to add about $3,500 to that.
President Barack Obama frequently says it’s important for Congress to stop the hike because one of the most daunting challenges after high school graduation is affording college. His administration has said keeping the rate low would help 7.4 million borrowers save, on average, more than a thousand dollars over the life of the loan. But doing so is estimated to cost billions annually at a time when Congress is gridlocked over budgetary and other issues.
