By Phil Corso
Loan interest rates doubled this week for more than 7 million students nationwide and northeast Queens reps put the blame on the Republican leadership in the U.S. House of Representatives.
Reps. Steve Israel (D-Melville) and Grace Meng (D-Flushing) called on Congress to pass the Student Loan Relief Act of 2013 earlier this year, which would have extended a reduction in student loan interest rates for another two years.
But the July 1 deadline for action came and went, ultimately allowing the fixed interest rates on subsidized federal Stafford loans to double from 3.4 percent to 6.8 percent.
Meng pointed a finger at House Republicans and used strong language in her critique of their failure to act. Their proposal included tying loan rates to the financial markets, which Democrats did not support.
“The lack of action by the Republican leadership in the House is a cruel and heartless attack on our nation’s students and families,” she said. “Our students are our country’s most important investment. An affordable college education is an essential tool for them to succeed in today’s competitive job market, and it’s critical for the future health and prosperity of our nation.”
The House had until July 1 to keep the rates from doubling before adjourning. Meng said there was still hope, however, to make a retroactive reduction to the rates when the House reconvenes July 8.
The College Cost Reduction and Access Act was passed under President George W. Bush in 2007, lowering interest rates on need-based federal Stafford loans from 6.8 percent to 3.4 percent over four years. The program was extended in 2012 for another year, giving the House more time to debate whether or not rates should be kept at the low rate.
But Israel said Congress needed more time to consider extending the rate cuts before the country’s college students are forced to make more than $1,000 more in repayments each year.
“An affordable and quality college education should be readily available, but too many students today are facing crippling student loan debt,” Israel said. “If nothing is done, millions of students and families will face higher student interest rates that they simply can’t afford.”
Israel said outstanding student debt currently sits at more than $1 trillion, with graduates leaving school owing an average of $25,000. When coupling that with a dismal job market, the elected officials said subsidized Stafford loans were more essential than ever for anyone seeking higher education and worth the $7 billion it would cost to extend the rate cuts.
Weeks before the deadline, Gov. Andrew Cuomo reached out to the state’s congressional delegation with hopes of swaying them to act. The governor said interest rates were initially cut in 2007 to jump-start an economic comeback, so allowing the reduction to expire was counter intuitive.
“Doubling the interest rate will make it more difficult for New York students and their families to afford college, consequently making it harder for them to acquire the skills necessary to contribute to New York’s economic revival,” Cuomo said. “As students and universities are a vital component to New York state’s economy, we must work to keep student loan interest rates low and predictable.”
Reach reporter Phil Corso by e-mail at pcorso@cnglocal.com or by phone at 718-260-4573.
