Student loans backed by the federal government are set to double this summer from the current 3.4 percent to 6.8 percent.
Millions of students will be in for a shock this summer unless Congress acts. The rate hike affects new subsidized Stafford loans, which are issued to low- and middle- income undergraduates.
With tuition costs at a high, students are taking on unprecedented levels of student debt. College students leave owing an average of $25,000 in loans, and student loan debt now surpasses credit card debt.
Recent filings with the federal government as a plaintiff increased 25 percent as cases concerning defaulted student loans surged 58 percent.
Does it make sense for student loan recipients to face higher loan costs than homeowners are getting on mortgages or that banks are able to get?
Even greater burden faces students that require graduate school after college. Many careers require the additional education.
I hope that people don't let this go under the radar because it is going to deny college access to many middle class and working families. The higher interest rates would affect loans taken out after June 30 and thus would hurt incoming freshmen and sophomores the most.
Hopefully because it is an election year we will see Congress put a priority on higher education. An interest rate increase on student loans potentially could become an election issue if it motivates collage-age students to turn out at the polls in big numbers.
With college cost increasing, with family finances struggling, and an uncertain job market, now is not the time to increase rates on student loans.