College students presented 130,000 letters to the Congressional leadership at the Capitol on Tuesday to protest the scheduled doubling of the interest rate on certain federally backed student loans this summer.
The interest rate on subsidized Stafford loans is set to double from 3.4 percent to 6.8 percent on July 1, increasing the average debt by $2,800 for the more than 7 million students receiving the loans, according to a spokesman for the Democratic members of the House Committee on Education & the Workforce.
In 2007, Congress voted to cut the Stafford interest rate in half by 2011, from 6.8 percent to 3.4 percent. The law containing that provision, the College Cost Reduction and Access Act, passed with bipartisan support. The cut cost an estimated $7.2-billion from 2007 to 2012, a burden that was shouldered almost entirely by lenders and loan-guarantee agencies, the Congressional Budget Office said.
Along with members of student advocacy groups, Sen. Jack Reed, Democrat of Rhode Island, and Rep. Joe Courtney, Democrat of Connecticut, attended Tuesday's event at the Capitol. The two lawmakers are sponsoring related bills, introduced in the Senate (S 2051) and the House of Representatives (HR 3826) in January, to extend the 3.4-percent interest rate for another year. The Congressional Budget Office estimates that measure would cost $6.7-billion.
Mr. Reed said it will be a challenge to pass the bill through Congress.
"It's hard doing anything here these days, it seems. It's particularly hard when there is a time limit like July 1, but the president is with us, and we are going to try to move it as quickly as we can," the senator said at the event.
The letters were collected by a coalition of student advocacy groups, including the U.S. Public Interest Research Group, Campus Progress, Rebuild the Dream, and the United States Student Association.
Tyler Dowden, a first-generation college student attending Northern Arizona University, said if the interest rate doubles in July, he would have to pay an extra $3,500 in interest on an expected $25,000 in debt.
Representative Courtney said there are "serious discussions that are going on" with Senate Majority Leader Harry Reid, Democrat of Nevada, and the White House to try to pass the bill before the July deadline. During his State of the Union speech in January, President Obama asked Congress to prevent the interest rate from doubling, and he noted that student-loan debt has surpassed credit-card debt for the first time.
It is unlikely, however, that House Republicans will budge on this issue. Leaders of the education committee have said that keeping the interest rate at 3.4-percent is a Band-Aid solution for college affordability, and the responsibility for keeping college costs low should fall on institutions rather than the federal government.
"We all want to promote efforts that will reduce college costs, but the era of empty promises has to end," said John P. Kline Jr., a Republican from Minnesota who is the committee's chairman, in a January 27 statement. That statement followed a speech on college costs that the president gave at the University of Michigan. "The interest-rate hike students face is the result of a ticking time bomb set by Democrats five years ago," Mr. Kline said. "Simply calling for more of the same is a disservice to students and taxpayers."
In defending the potential added cost of the measure, Mr. Courtney suggested that Congress make budget cuts elsewhere— for example, on federal subsidies for oil companies and banks—to keep the Stafford interest rate low.