LOGAN, UTAH – Douglas Fiefia, student body president of Utah State University and president of the Utah Student Association, signed a national call to action urging that national leaders avoid the looming hike in student loan interest rates. Joined by over 100 student body presidents around the country, the effort draws attention to the growing student debt crisis and suggests student-centered principles for solving the problem. Student debt now exceeds $1 trillion with the average student holding $27,250 in loans by graduation day.
“Over 37 million Americans are in student loan debt, which amounts to over one trillion dollars,” said Fiefia. “If student loan rates are allowed to double, it will not only hurt students but also our economy.”
Interest rates on subsidized Stafford student loans are set to double July 1 from 3.4% to 6.8% and will add nearly one thousand dollars to already overburdened students.
A number of reports now show that the enormous level of student debt forces young Americans to delay major life decisions like buying a home or starting a family. In addition, low interest loans are the mechanism by which many lower income families reach the middle class.
The letter urges Congress to keep several key principles in mind: keeping rates low, ensuring that repayment options are simple and predictable, and reinvesting cost savings back into financial aid. The letter also emphasizes that any market-based proposal should include meaningful protections against unpredictable, high interest rate environments, such as a cap on how high student loan interest rates can go.
“If a college education falls out of reach for millions of Americans, our entire economy will suffer the consequences,” the letter reads. “We urge you to take action by July 1 and believe now is an opportunity to implement a comprehensive, student-centered approach to student loan reform to more aggressively tackle the student debt crisis.”
If a long-term solution is not possible, the coalition expresses support for a short-term extension of the current rates at 3.4% until a time when such comprehensive reform proves politically viable.
This deadline mirrors the same July 1 deadline in 2012, when millions of students successfully urged the president and Congress to keep interest rates low. The resulting legislation extended the existing 3.4% interest rates for one year, creating this year’s deadline.