President Obama is calling on Congress to stop interest rates on student loans from doubling, continuing a push to make higher education a campaign issue.
The U.S. Department of Education offers six different federal loans but if Congress doesn’t act before July 1 the interest rate on subsidized Stafford loans will rise to 6.8 percent.
“In America, higher education cannot be a luxury,” Obama said in his weekly address. “It’s an economic imperative that every family must be able to afford.”
The federal government offers subsidized Stafford loans to students with financial need and pays the interest on the loan until the student graduates.
According to the White House, for every year that interest rates on these subsidized loans stays at 6.8 percent, students will rack up an extra $1,000 in debt.
The White House estimates that nearly 7.5 million students will be affected.
In 2007, Congress passed a bill that cut interest rates on subsidized Stafford loans in half, but for only four years.
“Bad policy based on lofty campaign promises has put us in an untenable situation,” said Rep. John Kline (R., Minn.), chairman of the House Committee on Education and the Workforce to the Wall Street Journal.
“We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers.”
But in his weekly address Obama criticized Republicans for supporting “huge new tax cuts for millionaires and billionaires” but not his efforts to limit student debt.
“Congress needs to keep interest rates on student loans from doubling and they need to do it now,” he said.
Still, the interest rate increase will only affect students taking out subsidized Stafford loans after July 1. A majority of students will not be affected by the rate increase.
Students who take out unsubsidized Stafford loans and graduate students who qualify for subsidized loans already pay a 6.8 percent interest rate.
According to Bloomberg Businessweek , Obama’s plan to attract younger voters will continue when he appears on “Late Night With Jimmy Fallon” this Tuesday.