NEW ROCHELLE, NY – Congresswoman Nita M. Lowey (D-Westchester/Rockland) today met with students at the College of New Rochelle to discuss two permanent changes to student loan programs that will take place on July 1st. These changes will significantly increase student and parent borrowing for college, making the college affordability crisis worse.
“At a time when tuition at four-year public colleges has risen 40 percent since 2001, this one-two punch will saddle millions of students with even more debt than they currently face and may even put college out of reach for millions more,” said Congresswoman Lowey. “It is unconscionable that the Majority in Congress could pass a bill to cut student aid by $12 billion and increase interest rates on student loans.”
Beginning on July 1st, the interest rates on outstanding federal student loans - for students who have already graduated from college - are going to rise to 7.14 percent for students and 7.94 percent for federal parent loans. Current consolidation rates are between 4.75 and 6 percent. On the same day, loans for current and future college students will be set at a fixed rate of 6.8 percent for undergraduate students and 8.5 percent for parent borrowers. The current rates are between 5.1 percent and 6 percent.
“The typical student borrower, which includes more than two-thirds of students, graduates from college with $17,500 in debt,” added Lowey. “I am urging students with outstanding loans to consider consolidating before July 1st. Consolidation will allow students to lock in an interest rate as low as 4.75 percent, which would save an average of nearly $3,500 over the life of their loans.”
Congresswoman Lowey is a cosponsor of legislation to reverse the Republican “Raid on Student Aid.” This bill would cut interest rates on student loans in half—from 6.8 percent to 3.4 percent for student borrowers and from 8.5 percent to 4.25 percent for parent borrowers. Under this legislation, the average student borrower, who has $17,500 in debt and 15 years to repay the loan, would save approximately $5,600 over the life of the loan.
To find out how much money students could save under the Democratic plan, they can visit www.house.gov/lowey to use the Student Aid Calculator.
