As summer approaches, the temperature won’t be the only thing that’s rising. If Republican inaction continues, student loan interest rates will double on July 1. An increase of this magnitude would impact over seven million college students – including more than 175,000 Virginians – and add nearly $1,000 each year to the average student loan.
In 2007, as part of the College Cost Reduction and Access Act, interest rates for undergraduate Stafford loans were lowered from 6.8 percent to 3.4 percent. Since then, 15 million students have benefited from lower rates. But without extension of this borrowing relief, interest rates are set to jump back up to 6.8 percent in July.
Stafford subsidized loans ensure access to a higher education for students from all economic backgrounds. A quality education allows future generations to reach their full potential, guaranteeing the long-term success of our nation’s economy. In many cases, a student loan is the first and best investment Americans take out in their name.
The average college student graduates with $25,000 in student debt, and tuition is rising at colleges and universities across the country. Reducing the federal deficit will require tough choices, but it is penny wise and pound foolish to try to balance the federal budget on the backs of our younger generations.
As Congress faces tight budgets and looming sequestration cuts, we must keep an eye on the future needs of our nation. In order for the United States to remain competitive we must invest in education. Children are no longer competing against their classmates; a globalized economy pits the American workforce against China, India and all the other countries around the world.
The Republican budget introduced by Rep. Paul Ryan took no action to prevent the doubling of student loan rates. House Democrats have introduced legislation echoing President Obama’s call to freeze the student loan interest rate at its current 3.4 percent rate.
History has shown that access to higher education is a ladder up for our nation’s children. I strongly support this legislation and will be pushing for its passage before the July deadline.
Rep. James Moran (D) is Virginia’s 8th Congressional District Representative in the U.S. House of Representatives.