Obama, students push Congress to prevent student loan interest rate increase

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With six days left before Congress makes a decision on the doubling of student loan interest rates, President Barack Obama and college students around the country continue to push for congressional action to stop the increase.

According to Obama, a cut in federal Stafford loan interest rates that Congress passed in 2007 is scheduled to expire July 1. If Congress does not pass the Stop the Rate Hike Act of 2012, which maintains the current 3.4 percent interest rate, by the end of the month, rates will double to 6.8 percent for the more than 7 million students with Stafford loans.

In April, Congress came to a gridlock between two different bills that would generate the $6 billion in subsidies needed to maintain the reduced interest rates — Democrats favored a bill that would generate money from cutting subsidies for oil companies, while Republicans favored a bill that would generate money from repealing a program from the country’s new health care plan.

Obama has been visiting college campuses to call on students to email, call and tweet lawmakers into action. He started a #DontDoubleMyRate Twitter campaign, through which people have been mobilizing to tell Congress to keep student interest rates reduced.

Earlier this month while visiting University of Nevada, Obama told students low student loan interest rates should be Congress’s priority in maintaining affordable higher education.

“The number one thing Congress should do for you … is to stop interest rates on student loans from doubling at the end of the month,” Obama said in his speech. “The clock is running out. You know, in today’s economy, higher education can’t be a luxury. It’s an economic necessity. Everybody should be able to afford it.”

UC spokesperson Dianne Klein said in an email that the university is also doing its part to keep the interest rates low.

According to Klein, more than 76,300 UC undergraduates received subsidized Stafford loans in 2010-11, and if the bill is passed, these estimated student borrowers could save approximately $1,000.

Klein said UC President Mark Yudof has written letters regarding the bill to Obama, Senator Dianne Feinstein, D-Calif. and all 55 members of the California congressional delegation.

“It is critically important that the federal government work together to keep borrowing costs low for students and their families,” Yudof said in the letter to Feinstein. “I urge you to take action to ensure that the interest rate on subsidized Stafford student loans does not double from 3.4 to 6.8 percent on July 1, 2012.”

Derek Zhou, president of Berkeley College Republicans, said the organization supports the bipartisan effort to extend current loan interest rates and gave his perspective as a UC Berkeley student.

“On behalf of myself, I think spending in education is certainly a good thing — the question is whether the money is always used effectively,” Zhou said.

Campus CALPIRG Treasurer Spencer Pritchard said the organization has been advocating for continued low interest rates as well.

Pritchard said the organization held a campus event on Valentine’s Day asking Congress members not to break its heart by doubling student loan interest rates. Since then the organization has sent out hundreds of student petitions and been to press conferences with Congresswoman Barbara Lee,  D-Oakland and Senator Barbara Boxer, D-Calif., to put pressure on Congress.

“Personally, I have these loans, and (the increase) will make it harder for me to pay off my loans,” Pritchard said. “It could affect my debt and make it harder for me to start other things in the future like buy a house … I think all students understand that you don’t want to be in a bind.”