Without Congressional Action, Millions of Americans will be Thrown into Deeper Debt come July
Past Democratic Congresses have taken significant steps to make higher education more accessible for families for whom a degree was financially out of reach. Democrats believe that our nation should invest in helping young Americans gain the skills and training needed to be successful in our 21st century economy.
One of the many ways we helped make higher education more financially manageable was by lowering interest rates on need-based student loans to 3.4 percent. Unfortunately, that reduced rate will expire and double to 6.8 percent this summer if Congress doesn’t act. Despite calls to work together to prevent this from happening, House Republicans have taken no action.
Congress should continue relief for students who are financially struggling to obtain the education and skills they need to succeed.
- The interest rates for more than 7 million students will double to 6.8 percent on July 1.
- At a time of historic low interest rates, borrowers will have to pay as much as $5,000 more in higher interest costs for a college degree if Congress doesn’t act.
- Outstanding student debt is now over $1 trillion. If Congress allows interest rates to double, this debt problem will only worsen.
The doubling of loan rates will hit students at a time when they can least afford it.
- Young Americans have the highest unemployment rate of any other group.
- Two-thirds of the Class of 2010 graduated with student loan debt.
- Those graduates left school with an average of $25,000 of student loan debt.
Democrats have worked to help students and families manage the cost of a higher education.
- Increased the maximum Pell Grant from $4,050 in 2006 and to $5,550 in 2010.
- Created the American Opportunity Tax Credit, providing a maximum $2,500 tuition tax credit to eligible families and students.
- Created the income-based repayment program to ensure graduates can manage loan repayment during stressed economic times.
- Provided loan forgiveness for graduates in public interest careers after 10 years of payments and for everyone else after 20 years of payments.
- Helped students and families shop for a good deal by helping them compare costs and the quality of institutions.
- Required schools to have an online calculator so that students and families could estimate their costs based on their family’s financial situation.
- Increased support for Historically Black Colleges and Universities, and minority-serving institutions.