WASHINGTON, D.C. — Interest rates on new subsidized Stafford student loans will double to 6.8 percent beginning in July unless Congress extends a cap that has helped make the loans more affordable for millions of Americans. Consumers Union, the policy and advocacy arm of Consumer Reports, urged lawmakers today to pass legislation to keep interest rates at their current 3.4 percent.
“Students and their parents are already struggling to keep up with the runaway costs of paying for college,” said Suzanne Martindale, staff attorney for Consumers Union. “Now is not the time to pile thousands of dollars in more debt on their backs by allowing student loan interest rates to double. Keeping interest rates low will help students afford the education they need to stay competitive in today’s tough job market. Congress should invest in our future and side with students and their families by extending the interest rate cap.”
A vote is expected in the Senate in the coming weeks on legislation to keep the current interest rate in place. The effort to extend the interest rate cap is supported by both President Barack Obama and Governor Mitt Romney. The existing interest rate cap was enacted through bi-partisan legislation passed by Congress in 2007.
An estimated 7.4 million borrowers will face higher interest rates on new subsidized Stafford student loans beginning in July if Congress fails to extend the cap on interest rates. If interest rates double to 6.8 percent, the average student will owe thousands more in student loan debt.
Two-thirds of all college students now graduate with student loan debt, compared to just one-third a decade ago. On average, these students graduate with $25,000 in debt. At over $1 trillion, student loan debt now tops what Americans owe on their credit cards.
Contacts:
Michael McCauley, Consumers Union, 415.902.9537 (cell) or mmccauley@consumer.org
David Butler, Consumers Union, 202.462.6262 or dbutler@consumer.org
Kara Kelber, Consumers Union, 202.462.6262 or kkelber@consumer.org
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and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or
other commercial influences, CR has exposed landmark public health and safety issues and strives
to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto
safety standards, to winning food and water protections, to enhancing healthcare quality, to
fighting back against predatory lenders in the financial markets, Consumer Reports has always
been on the front lines, raising the voices of consumers.
© 2012 Consumer Reports. The material above is intended for legitimate news entities only; it may
not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent,
nonprofit organization whose mission is to work side by side with consumers to create a fairer,
safer, and healthier world. We accept no advertising and pay for all the products we test. We are
not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports®
magazine, ConsumerReports.org® and our other publications and information products, services, fees,
and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use
of our readers. Neither the Ratings nor the reports may be used in advertising or for any other
commercial purpose without our prior written permission. Consumer Reports will take all steps open
to it to prevent unauthorized commercial use of its content and trademarks.
Consumer Reports is a nonprofit
membership organization that works side by side with consumers to
create a fairer, safer, and healthier world. For 80 years, CR has provided evidence-based product
testing and ratings, rigorous research, hard-hitting investigative journalism, public education,
and steadfast policy action on behalf of consumers’ interests. Unconstrained by advertising or
other commercial influences, CR has exposed landmark public health and safety issues and strives
to be a catalyst for pro-consumer changes in the marketplace. From championing responsible auto
safety standards, to winning food and water protections, to enhancing healthcare quality, to
fighting back against predatory lenders in the financial markets, Consumer Reports has always
been on the front lines, raising the voices of consumers.
© 2012 Consumer Reports. The material above is intended for legitimate news entities only; it may
not be used for advertising or promotional purposes. Consumer Reports® is an expert, independent,
nonprofit organization whose mission is to work side by side with consumers to create a fairer,
safer, and healthier world. We accept no advertising and pay for all the products we test. We are
not beholden to any commercial interest. Our income is derived from the sale of Consumer Reports®
magazine, ConsumerReports.org® and our other publications and information products, services, fees,
and noncommercial contributions and grants. Our Ratings and reports are intended solely for the use
of our readers. Neither the Ratings nor the reports may be used in advertising or for any other
commercial purpose without our prior written permission. Consumer Reports will take all steps open
to it to prevent unauthorized commercial use of its content and trademarks.
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