WASHINGTON -- Millions of college students could be in for a startle this summer when the fascination rate on a renouned federally subsidized tyro loan doubles unless Congress acts.
On Tuesday, college students delivered more than 130,000 letters to congressional leaders asking them to end rates from stepping up from 3.4% to 6.8%. The rate travel affects new subsidized Stafford loans, that are released to low- and middle-income undergraduates.
Tyler Dowden, 18, a Northern Arizona University freshman, mentioned at a headlines discussion outward the Capitol that he will connoisseur with $25,000 in debt. If the rate increases, he expects to increase about $3,500 to that tally.
President Barack Obama often tells crowds it is critical for Congress to end the increase since a of the many daunting challenges after high college graduation is affording college. His administration department has mentioned that gripping the rate low would help 7.4 million borrowers save more than $1,000 over the life of a loan.
But carrying out so is estimated to cost billions annually at a time when Congress is gridlocked over budgetary and other issues.
With many lawmakers behaving on a promotion promise, the Democrat-controlled Congress in 2007 transfered legislation to gradually descend the rate to 3.4% this college year.
Jennifer Allen, mouthpiece for Rep. John Kline, R-Minn., chairperson of the House Education and the Workforce Committee, mentioned in an e-mail that "we contingency possibly enable fascination rates to way up on tyro loans, or hang taxpayers with other multi-billion-dollar bill."
Kline's office estimates formed on a Congressional Budget Office figure that the annual cost to keep the rate low is about $6 billion, nonetheless Democrats estimated it would cost less.