CalPIRG members asked students to sign Valentine’s Cards to Senator Boxer, Senator Feinstein, and Representative Lee to pass HR 3826, avoiding an increase in student loan interest rate hikes.The group is gathering student signatures to try to convince Congress to renew legislation that would prevent the current interest rate for the subsidized federal Stafford loan — currently 3.4 percent — from doubling to 6.8 percent.
In January 2007, the U.S. House of Representatives passed a bill that lowered interest rates on the loans to their current levels, but only for undergraduate students. The law will expire July 1 unless Congress members vote to extend it.
The increase would affect future subsidized Stafford student loans — a sum of up to $23,000 given to qualified students enrolled in accredited higher education institutions.
Freshman Spencer Pritchard, a member of CALPIRG, said the group already has the support of Rep. Barbara Lee, D-Oakland, and will be sending large paper hearts with students’ signatures to Senators Barbara Boxer, D-Calif. and Dianne Feinstein, D-Calif.
“It doesn’t make sense to make us pay more,” Pritchard said. “It will be devastating to us. It will break our hearts.”
According to the New America Foundation, student loan interest rates have fluctuated in the past decade — students paid 8.19 percent in 2000-01, and 3.37 percent by 2004-05. After climbing to 6.8 percent by 2006-07, subsidized rates sank to 3.4 percent by 2011-12 while nonsubsidized remained unchanged at 6.8 percent, according to the foundation.
Student loan debt surpassed credit card debt in 2010, and Joseph Orsolini, president of Illinois-based College Aid Planners, said that means some families are getting in way over their heads.
“Anything that stops people and makes them look at how much they are borrowing is a good thing,” Orsolini said of the possible raised interest rate. “But, of course, lower interest rates are better.”
Orsolini said the doubled rate will not greatly increase monthly payments and predicted that lower-income families would be affected the most.
According to a semiannual report released Jan. 30 by the Consumer Financial Protection Bureau, students currently have an estimated $865 billion in college debt.
Many students who stopped by CALPIRG’s table Tuesday were sympathetic to the issue or had student loans themselves, said freshman and group member Emily Robinson.
“A lot of people have federal student loans and aren’t aware they’re going to be paying more,” Robinson said.
Junior Matthew Miranda signed the cards and called the possible interest increase “really worrisome.”
“My entire education is funded by loans,” he said. “If it wasn’t for the loans, I wouldn’t be here.”