Lowey And RCC Students Speak Against Possible Increase In Loan Rates

Congresswoman Nita Lowey (D-Westchester/Rockland) met Friday with Rockland Community College students and officials to discuss the looming increase of interest rates for Stafford loans, which are the most popular type of federal student loans. The rates are poised to double from 3.4 percent to 6.8 percent for the 2013-2014 school year unless Congress acts before July 1. More than 20,000 college students in Lowey’s 17th Congressional District currently rely on federal Stafford loans.

At the roundtable they urged Congress to move to prevent the student loan rates from doubling. Lowey spoke about her vote against Republican legislation that would result in loans with higher interest rates and increase student debt in the United States by $3.7 billion.

Last week, House Republicans passed a bill that would determine student loan rates yearly by calculating the 10-year Treasury note interest rate average and add 2.5 percent. Students who borrow the maximum amount of subsidized and unsubsidized Stafford loans over five years might have to pay almost $2,000 more in interest costs than if interest rates doubled to 6.8% on July 1.According to this formula, new loan rates would increase to 4.63 percent or a total of $3.7 billion over the next decade.

“Students and families deserve better than a bill that could force them to pay higher interest rates than they would if Congress simply did nothing and interest rates doubled,” said Lowey. “With total student debt currently at $1.1 trillion, we need legislation that keeps loans affordable, not legislation that increases student loan debt.”

Lowey cosponsored two bills that would prevent interest rates on federal student loans from rising.  One measure would lock in the current interest rate of 3.4 percent on subsidized Stafford loans for the next two years. The second bill would allow students to obtain federal loans at the same rates the Federal Reserve provides to banks, which can be as low as 0.75 percent.

Lowey has also worked to increase the maximum Pell Grant award, currently set at $5,500.  A total of 21,108 students at colleges and universities in Westchester and Rockland annually receive Pell grants.