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Education should not be the province of the lucky few, but the right of every American with skill and determination. Given the opportunity to better themselves through higher education, individuals can provide for their families and strengthen our nation.A college degree is becoming more essential than ever. In 1980, the gap between the lifetime earnings of a college graduate and a high school graduate was 40 percent. In 2010, it was 74 percent. By 2025, it is projected to be 96 percent.
The problem will only get worse if Congress does not act soon. On July 1, 2012, interest rates on subsidized Stafford student loans -- one of the few programs that is affordable for students and families -- will double, from 3.4 to 6.8 percent. In no uncertain terms, this would be another hit to middle-class and working-families, and a de facto tax increase on as many as 10 million people.According to the non-partisan U.S. Public Interest Research Groups (PIRG), if Congress does nothing, borrowers taking out the maximum $23,000 in subsidized student loans will see their interest balloon by an estimated $5,000 over a 10-year repayment period and $11,000 over a 20-year repayment period.
To ease the financial challenge of paying for college, we have introduced legislation in the House and the Senate to prevent interest rates on these student loans from doubling this year. Our bill would permanently cap Stafford student loan interest rates at a reasonable and consistent 3.4 percent for low-and moderate-income students.Student loans should be an investment that pays off, and can be reasonably paid off. Failing to pass this legislation will make it harder for smart, hard-working Americans to join and stay in the middle-class.
Under President Obama's leadership, Congress overhauled the college student loan program -- ending a flawed system that gave away billions in federal subsidies to private banks that simply acted as middle-men and putting those taxpayer dollars directly in the hands of students to pay for their education.Now we need to take the next step and prevent this looming rate hike.
I had no idea that student loans were supposed to go back to 6.8%. I think with the way the economy is they should keep the loan rates lower, at least for a little while.
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