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 rates from increasing from 3.4 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.
"I will be put back into buying a house and saving up for my expenses later on in life, and life as we know, is very unexpected. Adding that variable definitely limits my ability to be successful," said Tyler Dowden, 18, a freshman at Northern Arizona University who spoke at a press conference outside the Capitol before the letters were delivered in boxes with "Congress: Don't Double Student-Debt Rates" printed on the outside.
Dowden said he anticipates graduating with $25,000 in debt, but if the rate increases, he expects to add about $3,500 to that tally. He's studying to be a mental health therapist.
President Barack Obama frequently tells crowds 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.
With many lawmakers acting on a campaign promise, the Democrat-controlled Congress in 2007 passed legislation to progressively lower the rate to 3.4 percent this school year.