Obama, Romney Support Extending Student Loan Interest Rate Cut

Other Republicans, like Rep. Virginia Foxx, slam student loan debtors

If Congress does not act quickly, interest rates for federal student loans will increase, double in fact, from 3.4 percent to 6.8 percent in July 2012. At a time when current borrowers are already struggling with tuition hikes and therefore will be saddled with higher levels of student loan debt, it does not appear sensible to let these cuts expire.

If the rates do double, federal Direct Stafford loans will be affected.

President Obama will be visiting the University of North Carolina at Chapel Hill and also the University of Colorado in Boulder to discuss the issue this week.  Republican presidential candidate Mitt Romney announced today that he supports Obama’s call to maintain the low interest rate on these subsidized federal loans. Moreover, Republican Scott Brown of Massachusetts also supports the freeze.

Student loan advocates have commended Romney’s public support of the President. Rich Williams, higher education advocate for the U.S. Public Interest Research Group (PIRG) said, “We applaud Governor Romney’s support. 

“His endorsement should signal to Congress that this is a common sense, non-partisan proposal,” he added.    

Some critics have suggested that Romney’s call to freeze the interest rate is politically motivated, and it is likely that he will be accused of being a flip-flopper on yet another issue. After all, Romney has supported the budget plan of Congressman and House Budget Committee Chairman Paul Ryan (R-WI), which proposes deep cuts to funds for higher education. When Ryan unveiled his FY2013 budget plan, the proposal called for Stafford loans to double to 6.8%.  Interestingly, funds for higher education are miniscule, as Loop 21 has noted a few months ago.  Even more disturbing, outstanding student loan debt has surpassed credit card debt, having exceeded $1,000,000,000 in recent months.