Schumer calls on Congress to address rising student loan rates by summer

Sen. Charles Schumer (D-N.Y.) on Thursday announced his support for a bill to extend a reduced student loan rate for one year.

In July, the interest rates on federally subsidized Stafford Loans will double from 3.4 percent to 6.8 percent unless Congress acts.

Schumer called on Congress to pass Sen. Jack Reed's (D-R.I.) bill, S. 2051, which is pending in the Senate Health, Education, Labor and Pensions Committee.

"Rising interest loan rates sound like nails on the chalkboard for New York’s college students," said Schumer while speaking at Union College in New York. "Federal student loans are a critical resource for students to help cope with these costs, and that’s why keeping federal student loan interest rates low is a no-brainer. With July 1 fast approaching, I urge Congress to extend these low-interest rates to keep the dream of going to college alive… ."

Stafford Loans are offered directly from the U.S. government, making it easier for Congress to adjust the interest rates. Stafford Loans only go to the students most in need, and students typically do not have to start paying them back until six months after graduating. The federal government pays the interest while the student is in college, unlike unsubsidized Stafford Loans — which more students qualify for.

If Congress doesn't extend the 3.4 percent interest rate, students enrolling in college after July 1 would have to pay a 6.8 percent interest rate on their subsidized loans after graduation.

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