Rep. Maloney: Interest Rate Will Jump To 6.8 Percent On Monday

NEW YORK (CBSNewYork) — Three New York members of Congress on Saturday urged their fellow lawmakers to act before student loan interest rates double.

U.S. Reps. Carolyn Maloney, Gregory Meeks and Charles Rangel (D-N.Y.) said in front of Hunter College that Stafford loan interest rates will jump from 3.4 percent to 6.8 percent effective Monday, adding up to $4,500 to each student’s debt load.

They demanded Congress act immediately to stop the hike from happening.

“The most important thing we can be investing in is the education of our children,” Maloney told WCBS 880. “But on Monday, July 1, millions of hopeful young Americans will find themselves between a rock and a hard place if Congress doesn’t act to prevent the doubling interest rates on federal subsidized Stafford loans.”

She said she hopes Congress will work quickly to extend the cap on student loan interest rates, until the student debt crisis can be dealt on a longer-term basis.

“We should be back in D.C. trying to get a deal done on the bill – the Student Loan Relief Act. The Democrats are proposing to extend for two years the loan, until we can work out an agreement. We have to reauthorize the Higher Education Act of 1965 next year, and we really need to pass an extension until we can figure out how to address the issue of student debt.”

If the doubling of the interest rate is allowed to go ahead, students will suffer severely, Maloney said. She said student loan debt in American already has hit a record high of $986 billion for roughly 7 million students.

“Already, student debt has surpassed credit card debt as the largest area of consumer debt in our country,” Maloney said. “Many of our young people are graduating with a huge load on their backs, and this means they can’t furnish an apartment, or rent an apartment, or buy a home or a car, or invest in the economy.”

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