On July 1, interest rates on subsidized government loans will double from 3.4 percent to 6.8 percent unless Congress extends the current interest cap on these rates.
According to an analysis by the Congressional Budget Office, the cost for the federal government to maintain the lower interest rate is $5.8 billion.
“The issue with lower interest rates is how to pay for them. The GOP wants to offset the cost of lower interest rates with cuts elsewhere,” said David Dulio, associate professor and political science department chair.
Republicans focused on curbing government spending are not willing to consider keeping current rates unless an alternative way to pay for them is found, said John Klemanski, political science professor.
In April, the House of Representatives passed a plan that would keep loan rates at 3.4 percent, but the Senate has not acted.
Comparatively, the Senate has tried to pass two different plans to maintain rates, but both were rejected by the House.
Politicians from different parties want to find an alternative to raising the interest rates on student loans. Both President Barack Obama and Republican presidential nominee Mitt Romney have made it known that they think Congress should take action with the issue, according to an article published by CNN Money.
“It’s hard enough for people to pay back student loans and an increase in interest will just make it harder for the government to get its money,” Jade Bemiss, a junior, said.
Despite negative student responses to the potential July increase, many are still thankful to be able to receive loans and the opportunity for higher education.
“Anyone who gets a loan and the chance to go to college is lucky because not everyone gets loans, and some people cannot get educated because of it,” Bemiss said.