The Obama administration on Monday urged Congress to preserve low interest rates on student loans that are funding tuition for almost one-third of Northwestern undergraduates.
Barring legislative action, interest rates on Stafford loans are set to double from 3.4 to 6.8 percent on July 1.
According to the White House, the impending hike would affect more than 7.4 million students nationwide and add $1,000 of debt to each of their loans.
More than 2,600 undergraduate students at NU this academic year are on Stafford loans, which allow needy students to borrow from the federal government without having to pay back any amount until they graduate.
“At a time when college is never more essential, it’s never been more expensive,” White House spokesman Matt Lehrich told reporters on a conference call Monday.
Lehrich was joined by Cecilia Munoz, director of the president’s Domestic Policy Council, who said the strength of the U.S. economy is “inextricably linked with” the strength of the country’s education system.
The conference call kicks off a week-long push by the Obama administration to hammer home what Lehrich called “Congress’ critical need” to protect the lower interest rate. The president will speak about student debt at swing-state colleges today and Wednesday, with an appearance on “Late Night with Jimmy Fallon” tonight.
In his weekly radio and Internet address Saturday, Obama said the student loans issue “didn’t come out of nowhere,” blaming congressional Republicans for blocking college affordability measures over the years.
U.S. Rep. Joe Courtney (D-Conn.) has introduced legislation that would freeze the 3.4 percent interest rate, but it has yet to attract GOP support. As of Friday, the bill had 127 Democratic co-sponsors.
“Making it harder for our young people to afford higher education and earn their degrees is nothing more than cutting our own futures off at the knees,” Obama said in Saturday’s address. “Congress needs to keep interest rates on student loans from doubling, and they need to do it now.”
Despite Obama’s rhetoric, the low interest rate extension found a prominent Republican ally Monday.
At a news conference with U.S. Sen. Marco Rubio (R-Fla.) a day before the Pennsylvania primary, Romney unexpectedly walked back to the microphone, saying, “I fully support the effort to extend the low interest rate on student loans.”
Brian Drabik, NU’s associate director of undergraduate financial aid, said he hopes the president’s newest cause endures beyond Election Day and is not just a single-year solution.
However, Drabik called it even more “concerning” that federally subsidized loans will no longer be available for graduate students starting on the same date the interest rate could double. That less-publicized change resulted from last summer’s debt ceiling agreement.
“I wish they could find ways to subsidize the other aid programs without subsidizing one that so many students benefit from,” Drabik said. “It’s difficult to see them cut a program that helps so many people.”
Either way, McCormick junior Keegan Dunn expressed little alarm that the interest rate on his Stafford loan could jump several percentage points this summer. He said the rate doubling would add less than $200 to his senior-year loan.
“Three-point-four or 6.8 percent — those are both pretty low compared to what I’d be paying for a private loan,” Dunn added. “I wouldn’t say it would unduly affect me. It’s not going to make or break anything.”