Students nationwide signed more than 130,000 letters to four Congressional leaders last week to protest the higher interest rates set to take effect in July on some student loans.
Subsidized Stafford loans – interest rates for which will double to 6.8 percent without Congressional action – provided about 4,700 undergraduate GW students with more than $30 million in education funding this year. The average subsidized loan award was $4,760 in 2011, data from the U.S. Department of Education show.
“Today student voices will be heard loud and clear by delivering over 130,000 letters to leaders in Congress. Our message is simple: Don’t double student debt rates,” said Rich Williams, a higher education advocate with the United States Public Interest Research Group. “Rising college costs, tight family finances and uncertain job prospects pack a triple whammy for student borrowers. In this economy, the last thing we should do is double the interest rates on student loans.”
In 2010, the average debt of GW graduates was more than $32,500, significantly higher than the national average, according to the Project on Student Debt’s latest information.
“Congress has effectively been paralyzed so there is a risk that, due to lack of momentum in Congress, interest rates could end up doubling. So that is why it is important that we are out there banging the drums on this issue and showing and reminding lawmakers that people actually care,” Williams said.
Associate Vice President for Financial Assistance Dan Small declined to say if he expected the petition to trigger Congressional action, but said GW will work to notify students once a final decision is made.
“We will have to wait until the debate has been finalized and Congress has made a decision,” Small said.
The current interest rate is the result of federal legislation passed in 2007, which set out to halve the 6.8 percent fee over four years. Without a move by Congress, the interest rates will return to their pre-recession 6.8 percent July 1.
Under the planned changes, almost 8 million students nationwide will have to pay an average of $2,800 more in student loan debt over a 10-year repayment term, Williams said. The bump in interest fees tied to the loans carry heavy consequences, he warned.
“Buying a home, getting married, starting a family – all of those major decisions might be postponed because of the quantity of debt a graduate has,” he said.
Small said he had not heard concerns from GW students but emphasized that the University will not react until a federal choice is handed down.
“I’m sure some are upset, but probably know it is out of GW hands,” he said.
Speaker of the House John Boehner, R-Ohio, House Minority Leader Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev. and Senate Minority Leader Mitch McConnell, R-Ky., the Congressional leaders to whom the letters were addressed, did not return requests for comment.
–Chelsea Radler contributed to this report.