After several months of the Obama Administration pushing for action and students wielding the hash tag ”DontDoubleMyRate” on Twitter, Congress sent a measure to President Barack Obama Friday that will put a one-year freeze on the 3.4 percent subsidized student loan interest rate.
Packaged with legislation that will maintain jobs on transportation projects, the measure will prevent the subsidized student loan interest rate from doubling to 6.8 percent as was scheduled to occur July 1. Money saved from using revised pension funding procedures will fund the rate extension, as well as narrowed eligibility requirements for Stafford loans. Students seeking four-year degrees can apply to receive subsidized Stafford loans for up to six years and for up to three years for two-year degree programs.
The College Cost Reduction and Access Act passed in 2007 and lowered the traditional 6.8 percent interest rate on federal Stafford loans to 3.4 percent for four academic years. The rate was to return to its normal rate on July 1, but Republicans and Democrats both expressed interest in extending the lower rate.
The increase would have impacted the 7.4 million students expected to take out subsidized loans in the coming academic year and increased the debt over the life of each loan by $1,000.
Secretary of Education Arne Duncan said in a Friday news release that he applauded Congress for responding to the Obama Administration’s call to make education more affordable for millions of students.
Duncan said the actions of the nation’s young people directly impacted Congress’ decision to move the measure forward.
“You spoke, the nation heard you and Congress acted,” Duncan said. “Democracy worked because of your tireless efforts.”
Melissa Pizzo, ASU financial aid interim executive director, said the University continues to support Obama Administration initiatives to make college more affordable.
“Not increasing the interest rate does help keep the cost (of education) lower for the students,” Pizzo said. “Financial aid is a limited resource. It’s important to know what’s out there, how to get it and how to find it.”
Economics sophomore Jon Woodmansee, who is taking out a subsidized student loan, said Congress’ decision to freeze the interest rate for one year would help to make education affordable and accessible.
“(The interest rate freeze) is essential,” Woodmansee said. “Students taking out subsidized loans need them for a reason.”
Woodmansee said he could only hope education funding would increase in the future.
“Of course, (a funding increase) is highly dependent on who wins (the presidential election) in November,” Woodmansee said. “Education is incredibly important and an affordable education is even more so.”
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