Last week, Congress let down students, families, and the economy when they failed to prevent the interest rate on subsidized Stafford student loans from doubling.
Congress was blocked in its attempts to prevent the increase by legislators who insisted on charging students more for their loans, as a way to lower the deficit. As a result, the rate on these loans doubled to 6.8 percent on July 1. This increase will cost over 11,000 student borrowers in Alaska an additional $905 for each loan they take out.
This failure will not only affect student borrowers, it will also harm the economy — to the tune of $10.5 million in additional spending on student loans.
Fortunately, Congress can still act this summer to pass a retroactive extension, before colleges issue student loan packages in August and September.
We urge Congress to protect students and the economy by acting quickly to reverse this rate increase.
— Jonathan Leidenheimer
U.S. Public Interest Research Group,
Washington, D.C.