On Wednesday, Sen. Sherrod Brown held a news conference call announcing new legislation to prevent a hike in interest rates on students loans to 6.8 percent from 3.4 percent, scheduled for July 1.
The Student Loan Affordability Act of 2013 will block interest rates from doubling. Low and moderate-income students at schools similar to Youngstown State University will add an average of $1,000 to each student loan.
More than 360,000 students across Ohio would be forced to pay thousands more each year in college loan costs unless Congress acts to block the interest rate from doubling on federally subsidized Stafford loans by July 1.
Brown said the legislation would keep college affordable for the middle class and low-income students and close tax loopholes in big business.
“If a business closes their doors in the U.S. to leave for China, they receive tax breaks for moving expenses.” he said. “This would ensure all forms of crude oil are included in The Oil Spill Liability Trust Fund, eliminating a special loophole that saves the oil industry money, but not making them making them pay to clean up tar and oil sands.”
Student debt now exceeds $1.1 trillion coming second to mortgage debt and surpassing credit card and auto loan debt in American.
Amish Patel, Kent State University’s Student Body President, joined Brown on the call, explaining how the legislation will affect hundreds of thousands college students in Ohio.
“[College students] are trying to get better jobs and reach our dreams. Stafford loans and various support help us get there,” Patel said. “The doubling of rates will be a huge burden on students.”
Patel said he works two jobs, like many of his classmates, and that the legislation needs to be recognized by Congress.
“If students are the future of the country, we need to be able to support them,” Patel said.
The College Cost Reduction and Access Act of 2007 cut the fixed interest rates on subsidized Stafford loans for students to 3.4 percent.
The rate increase does not apply to loans that are currently in repayment or that have already been disbursed. However, students attending school after July 1 choosing to take out new federally subsidized Stafford loans will pay the increase.
Average student loan debt in America is currently $30,000.
“This is hopeful time for recent graduates. We know as people look forward, many leave college with lifetime debt. New graduates will struggle to pay off debts instead of starting business, buying homes and putting money back into the economy,” Brown said.