Congress must act
to keep interest rates on student loans subsidized by the federal government to
double this summer, the chairman of the Senate Education Committee on Tuesday.
College students are faced with an expiration date of this summer at lower interest rate. These rates will double from 3.4% to 6.8% of federally subsidized loans on July 1, unless Congress acts.
Senator
Tom Harkin, the Iowa Democrat who is chairman of the Senate Health, Education,
Labor and Pensions Committee, emphasized the need to keep rates on existing
loans.
"With
global interest rates stuck at historic lows," Harkin said in a committee
hearing, "we can not allow interest rates for Stafford loans twice as
middle class students and families struggling to pay for higher education ".
Senator
Jack Reed, Democrat of Rhode Island, and Rep. Joe Courtney, Democrat of
Connecticut, introduced legislation last week that would keep the current rate
for two years. Faced
with the same dilemma in 2012, Congress renewed the lowest interest rates for
one year, extending a policy enacted in 2011.
Vivica
Brooks, a student at Bowie State University in Maryland, thanked the senators
for the lowest rate, which he described as "fundamental to making higher
education more accessible."
Financial aid
is increasingly common. According
to the National Association of Managers of Student Financial Aid, 9.3 million
students relied on federal subsidized Stafford loans totaling $ 39.7 billion
for the 2010-11 school year. The
total student loan program cost taxpayers $ 36.9 billion in fiscal 2012,
according to Congressional Budget Office data.
"It
is important to recognize that, first, (these) are targeted to the neediest
students," said Ethan Senack associated higher education in the U.S. Public Interest Research
Group, the committee. "We
are talking about students who needed more money to go to school what is
done."
But
Sen. Lamar Alexander of Tennessee, the ranking Republican on the committee,
expressed concern about the "enormous amount of federal money that follows
students to the college of their choice."
Also heated discussion about the Pell Grant program.
Also heated discussion about the Pell Grant program.
In
2011, the top award covered two thirds of the average state tuition at public
universities in the state and just over a quarter of the out of state tuition.
Alexander
said the Pell grant award average was higher than the average community college
tuition, which confirms the data of others. According
to the Department of Education and the American Association of Community
Colleges, the Pell grant award average in 2011 was $ 3,800, while the average
community college tuition in the 2011-12 school year was $ 2,963.
In
March 2010, Congress passed a bill to reform the student loan process, which,
among other things, made more generous Pell Grant by linking the consumer price
index from 2013 to 2017. The
total award amount is expected to increase from $ 5,550 to $ 5,975.
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