Lawmakers Trying To Halt The Rise Of Student Loan Rates
MINNEAPOLIS (WCCO) – Pressure is building for thousands of college students who could soon be paying more for school loans — a lot more, if Congress doesn’t act soon.
House Republicans are calling for the Senate to approve a bill the House passed last week. It would keep the interest rates on federal student loans from doubling.
St. Mary’s psychology major Rim Woldeslassie knows she’ll graduate deep in debt.
“I would have to say at least $30,000,” she said.
For 200,000 Minnesota students like Woldeslassie, graduation doesn’t always mean a new life.
“I guess you can’t really call it a life, because I would probably have to live back at home and work whatever job I can get just to pay off my debts,” she said.
In fact, 71 percent of Minnesota’s public and private college students leave school with loans. The average debt is nearly $30,000.
And gridlock in Washington isn’t making it any better.
If Congress does nothing, student loan rates will double on July 1 from 3.4 percent to 6.8 percent.
President Barack Obama and Democrats are backing a bill to freeze student loan interest rates for another year…and blaming Republicans for the impasse.
“The last thing we need to do as elected leaders in this country is to make it more difficult for them to plan for their future,” said Ken Martin, the chair of the DFL.
But there is a long-term plan.
Minnesota Congressman John Kline, a Republican, wrote a bill setting flexible interest rates that go up and down with the market. And Tuesday called for swift action.
“I’ve been here for 10 years. I don’t know that there’s ever been a better opportunity to work towards a real solution,” Kline said.
None of it sounds promising to Woldeslassie, whose loan payments are due the day she graduates.
“I am guessing I will be [paying back loans] until the day I die,” she said.
A spokesman for the University of Minnesota said the university’s president, Eric Kaler, supports Kline’s bill.
He says it gives students more predictability when they take out school loans.