With student loan debt reportedly exceeding $1 trillion, lawmakers are now faced with the daunting task to consider legislation that will keep rates low. While the government continues to advocate for higher education, the growing national deficit is now forcing lawmakers to consider cutting funding that will directly affect college students’ ability to repay education debt.
According to Fox Business, the decision rendered could double current student loan rates for subsidized Stafford loans for close to 8 million borrowers. Rates for families participating in this particular federal education loan program could see the current interest rate of 3.4 percent rise to 6.8 percent if Congress elects not to renew the College Cost Reduction and Access Act. This could potentially result in many students finding that continuing their education is no longer feasible.
So, what does Congress have to say to the millions of families that are anxiously awaiting a decision that could add thousands of dollars to their student loan debt? Fox Business reports that Rep. Courtney of Connecticut has proposed legislation that would prevent the rates from spiking. The congressman was quoted as stating, “We know that if the rates double, interest costs are going to add another $5,000 to $10,000 on graduates’ student loan debt and that’s something that I think students and families see much clearer frankly than the budget rules of Washington.”
Should Congress decide that budgetary policy simply will not support the renewal of the College Cost Reduction and Access Act, many graduates will soon be facing new trials upon graduation. Not only has the job market become more competitive than ever, but now they must face the possibility of being even deeper in debt than they originally anticipated. Will the increased student loan rates stop student borrowing? Not likely, but it will certainly put a dent in their wallets come repayment time.
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