If you’ve got student loans, it might be time to crack open the piggy bank, search the couch cushions and re-introduce yourself to the dollar menu.
Student loan interest rates will double to 6.8 percent on July first unless Congress votes to keep the rates low. The rate hike will affect about 7 million students who attended college using Stafford loans.
According to a recent CNNMoney blog, the controversy over rising loan rates has started a blame game in Congress, but the mudslinging isn’t producing any solutions. Lawmakers in both parties agree that something should be done, but they don’t agree on what, the CNNMoney blog explains. (Click here to read the CNN blog.)
Rising interest rates are a national issue, but the looming rate hike has caused considerable concern in California, where it is estimated that more than 700,000 students use Stafford loans.
Most recently, the rising rates drew criticism from Congressman John Garamendi (D-Fairfield, CA,) a former University of California regent and Cal State trustee. Garamendi is one of the co-sponsors of the Student Loan Relief Act, which would freeze pre-hike interest rates for the next two years.
So far, the bill has not garnered enough support to reach the floor of the House.
“A college education provides a ladder for people to climb up toward their American Dream,” Garamendi said in a news release. “However, in just one week, hard working students at UC Davis, Solano Community College, Yuba College, and schools across the country will be kicked down a rung unless Congress acts to prevent Stafford Student Loan Rates from doubling. Forcing students to pay an average of $1,000 more for their education would not only hurt them, it would harm America’s families, businesses, and our economy. For that reason, I have called for legislation freezing the current rate to be brought to the floor. Congress should not adjourn until we stop this senseless rate hike.”