New York representatives call on Congress to take action on student loans
With the national student debt currently at more than $1 trillion and a new crop of recent graduates entering a less-than-stellar job market, keeping interest rates low is essential for reducing overall student loan debt and helping borrowers make their monthly payments. But the current fixed interest rates on subsidized federal Stafford loans are set to double from 3.4% to 6.8% on July 1st if Congress does not take action.
Taking action on student loans
To prevent student loan borrowers from falling even deeper in debt, U.S. Reps. Steve Israel (D-Melville) and Grace Meng (D-Flushing) are calling on Congress to prevent student loan interest rates from doubling. Under the 2007 College Cost Reduction and Access Act, interest rates were lowered gradually on Stafford loans from 6.8 percent to 3.4 percent over a four-year period.
In an article in the Times Ledger, Rep. Meng said the failure of Congress to act and extend the lower interest rates could be catastrophic for students.
Make no mistake, students from New York and across the nation will be hit hard if Congress fails to prevent interest rates from doubling.
Balancing the federal budget is crucial. But it should not be done on the backs of our students.”
Reps. Israel and Meng aren’t the only government officials calling on Congress to make help make repayment less of a struggle for people with student loan debt. Sen. Kirsten Gillibrand (D-N.Y.) recently introduced a bill of her own that would force the U.S. Secretary of Education to automatically refinance most government student loans with interest rates above 4 percent into fixed, 4-percent loans.
What can be done?
It’s clear that something needs to be done to help people struggling to afford their payments and to reduce the amount of student loan debt overall. But until then, it’s important for borrowers to avoid slipping into default by choosing a repayment plan that allows them to afford their monthly payments.
If you have student loan debt, make sure to check out our repayment strategies and read our post on how to pay back your student loans. For help choosing which repayment plan is best for you, feel free to reach out to Rick and Andy via email or by calling us at 1-888-234-3907.