By Jen Mishory & Reid Setzer
Last week, Congress took an unusual bipartisan step and voted to keep interest rates low on popular subsidized Stafford Loans.
This means that 7.4 million students taking out new loans this fall will continue to have access to loans with lower rates. The provision was overwhelmingly approved in both the House and Senate and will be signed by the President on Friday, July 6, holding rates steady at 3.4%. This will save students, on average, an extra $1,000 for each year of school they attend.
Derek Pugh, an undergraduate at American University (and current YI intern) echoed the sentiments of millions of students around the country: “I am ecstatic and relieved that Congress acted to keep student interest rates from doubling for another year. Keeping interest rates from doubling means that thousands of other students, their families, and myself will … not graduate further in debt.”
This change was far from certain. Just six months ago, the House GOP budget assumed that rates would double. Student advocates had to fight to ensure that keeping rates low became a priority for their leaders in Washington. Hundreds of thousands of students and supporters spoke up, got organized, shared their stories, signed petitions and got their message out to both lawmakers and the population at large: student loan interest rate increases are unacceptable in a climate where college costs are rising every year, American student loan debt totals over $1 trillion, and the youth unemployment rate is 16.1%. Congress hit a snag in debating how to pay for this fix, but ultimately the student voice won out.
Certainly, this improvement doesn’t fix the problem of student debt. But it’s a step in the right direction: it saves $1,000 for 7.4 million students, and it shows Washington that young people are willing to battle for these victories. As college tuition continues to rise, Pell grant funding faces a shortfall in a couple of years, and student debt becomes increasingly unmanageable, more action is needed. It’s time to take this momentum and demand bold reforms to the higher education system.