POSTED: Monday, July 1, 2013 - 8:23am
UPDATED: Monday, July 1, 2013 - 1:20pm
El Paso, TX (KTSM) — Students preparing to take subsidized government loans will see their interest rates double to 6.8 percent. The change takes effect Monday.
All hope is not lost yet. Lawmakers are trying to strike a last minute deal to save the seven million college students slated to take the subsidized federal Stafford loans this year.
The higher rates only apply to new loans. Only Congress can change the rates.
Congressman Beto O'Rourke expressed his disappointment on his Facebook page Monday morning.
The full text is below:
STUDENT LOAN RATES: I am deeply disappointed that the House and Senate adjourned for a week long recess without acting to prevent federal student loan interest rates from doubling to 6.8% today. If the rate increase is not fixed, college will become out of reach for students all over the country. At UTEP, 9,600 students rely on federal student loans to pay for school. If the rate increase is allowed to stand, many of these students will be forced to make extremely difficult decisions about whether they can afford to continue their education.
This is a crisis that we can fix. I have cosponsored legislation to maintain the current 3.4% rate for two more years and last week I signed a discharge petition to try and force a vote on this bill. I am open to other ideas as well, including pegging the rates to market rates for Treasury bonds (as President Obama has proposed) as long as the rate students pay is fixed. In May, the House majority brought up a bill that would tie rates to the market, but it made the rates variable. The Congressional Budget Office estimated that this would increase costs for students by $4 billion and students would not have the certainty to adequately plan. I did not support that plan.
I think we can reach a compromise and pass something that can be signed into law and can keep college within reach, but we need to be in session to do it. I look forward to getting back to DC and fixing this problem.