Federal Student Loan Rates Set To Double

Students Worry About Rising Costs of College

President Barack Obama is set to visit the University of Colorado at Boulder on Tuesday to talk to students about a looming spike in student loan interest rates.

In July, interest rates on federal student loans are set to double from 3.4 percent to 6.8 percent.

In 2007, Congress passed the College Cost Reduction and Access Act, which reduced interest rates on subsidized Stafford Loans to 3.4 percent for four years, but that is set to expire.

Unless Congress acts, the changes could effect 7 million students nationwide.

"I consider it a mortgage," said graduate student Pieter Tolsma.

Tolsma and Bridgett Royer are both graduate students who are paying for school through federal aid and have racked up nearly $100,000 in federal student loans.

"What is the point of raising the interest rates if we cannot find jobs, or if those jobs can't pay us enough to live as well as to pay off debt, which leads to trouble?" said Royer.

For the fist time, Americans owe more on student loans than on credit cards, with student loans topping $1trillion.

Obama is using his CU visit to push to get Congress to extend a law that cut interest rates on a popular federal loan program for low- and middle-income undergraduates. If the law expires, the rates on subsidized Stafford loans will double on July 1, from 3.4 percent to 6.8 percent.

But the cost of keeping the interest rates frozen could run $6 billion a year.

Obama campaign officials estimate about 8 million voters between the ages of 18 and 21 weren't old enough to vote in 2008 but could be swayed to support the president this time. Whether students will vote in large numbers for Obama again will depend on how their personal finances stack up against others since college graduates have faced high levels of unemployment.

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