Maintaining college affordability is getting tougher for students and their parents with tuition increases and interest rates increasing.
U.S. Sen. Sherrod Brown, D-Ohio, said Congress needs to act fast or U.S. families will suffer.
Brown said interest rates on federally subsidized Stafford loans are set to double, topping out at 6.8 percent. That would be affect 15,000 students in the Mahoning Valley.
Brown said when the average student graduates from schools like Youngstown State University he or she has an average of $30,000 in student loan debt.
“That means it’s harder to get started in life after graduation, buy a car, buy a house, start a business, and we’ve got to do better for the next generation,” said Brown. “Freezing interest rates will help, but we’ve obviously got to do better than that in terms of restraining college costs.”
Brown said he wants to do more long term work on making loans more available.
Dismissing a veto threat from President Barack Obama, lawmakers in the House passed legislation Thursday that links student loan rates to the ups and downs of the financial markets in a vote largely along party lines.
The Republican-backed bill would allow students to dodge a scheduled rate hike for students with new subsidized Stafford loans next month, but rates could rise in coming years. Democrats largely opposed the measure – which they branded the “Making College More Expensive Act” – while the Republican chairman of the Education Committee labeled the legislation a starting point for negotiations with the Senate and White House.
“The American people sent us here to tackle tough issues, not kick the can down the road. The time to act is now. Students, families and taxpayers cannot afford further delay,” House Education and the Workforce Committee Chairman John Kline said after the vote.
Interest rates on new subsidized Stafford loans are set to double, from 3.4 percent to 6.8 percent, on July 1. Lawmakers from both parties say they want to avoid the increase but were divided on how.
Some Democrats are seeking a two-year extension of the current rates until Congress takes up a higher education bill later. Republicans have rejected that proposal – expected to cost taxpayers $9 billion – as costly and irresponsible.
The House measure passed by a vote of 221-198. Eight Republicans and four Democrats broke from their party.
Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 percent, according to the nonpartisan Congressional Research Services. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000.