New Report: Doubling of Student Loan Interest Rates Will Cost New Yorkers Nearly $420 Million if Congress Doesn't Act by July 1st
Gillibrand, Students, Parents Urge Congress to Protect Low-Interest Student Loans
May 15, 2012
Washington, D.C. – According to a new report by the Public Policy and Education Fund of New York, USAction Education Fund, and Campus Progress released on Tuesday, New York students would save almost $420 million if Congress takes action to maintain the current Stafford student loan interest rate of 3.4 percent. Details of the report, How New York Will Be Affected if Stafford Loan Interest Rates Double, were announced by U.S. Senator Kirsten Gillibrand, and members of Citizen Action of New York, New York Students Rising, and Campus Progress.
“We need to make college more affordable and open the doors of higher education to anyone who is willing to work their hardest,” Senator Gillibrand said. “I’ve heard from New Yorkers in every corner of our state about the real and lasting impact this will have if their interest rates double. It’s wrong, and we can avoid this crisis if Congress does its job, sets politics aside, and finds common ground to keep interest rates on Stafford Loans affordable.”
With tuition costs rising, state higher education funding decreasing, and student loan debt surpassing credit card debt, increasing the interest on federally subsidized Stafford loans would limit access to higher education for hard working New York students. Student loan debt in America now totals over $1 trillion.
“A college education is the gateway to a career and the middle class - we cannot afford to limit access to higher education, especially while our economy is trying to recover,” said Karen Scharff, Executive Director of Citizen Action of New York. “New York students need our leaders in Congress to act now to prevent the student debt burden from growing even further out of control.”
Currently, 422,670 New York students have borrowed funds through Stafford student loans. By maintaining the current Stafford loan interest rate, New York students would save $419,711,310, an average of $933 per student. The savings is even higher for students of color, who would see their debt burden increase even more if the rate was allowed to double.
If Congress does not act by July 1, the current interest rate on Stafford loans will double from 3.4 percent to 6.8 percent, affecting 7.4 million Americans, endangering economic recovery and threatening the future of millions of college students for whom low-interest loans represent a lifeline to a better future.
“We’ve heard from students, parents, and grandparents from every state across the country who are dealing with the tremendous burden of student loans. Preventing the student loan rates from doubling is an investment in more than 7 million students and an investment in our economy. These families and students cannot afford to wait any longer and are counting on Congress to find a bipartisan solution,” said Anne Johnson, director of Campus Progress.
“The last thing New York students need - as tuition has risen astronomically at both of New York’s public higher education systems along with a decrease in state funding and program cuts at universities across the state - is for the interest rates on Stafford student loans to double,” said Sophia Smart, a recent graduate from UAlbany and an organizer with New York Students Rising.
“After I graduate with my Masters Degree, I'll have over $30,000 in student loan debt. I'm worried about being able to send my daughters, who are 15 and 12, to college, and how my own debt will affect their ability to access higher education," said Lynne Theophanis, a parent from Vestal, who is also pursuing her MSW at Binghamton University. "Like parents across New York and America, I want my children to have the best chance for success in the future. Our leaders in Washington need to step up and act on behalf of working families like mine who need more access to higher education.”
The report can be downloaded here: http://citizenactionny.org/wp-content/uploads/2012/05/new_york.pdf