RALEIGH - The U.S. Congress remains gridlocked over the pending increase in student loan interest rates, which will go into effect on July 1st. Senator Kay Hagan of North Carolina says this would have a detrimental effect on college students, including thousands in North Carolina.
“If Congress doesn’t act by July 1st, interest rates…will go from 3.4 percent to 6.8 percent and that affects 175,000 students in our state.”
Hagan says the increase would make higher education less attainable, which will only hurt the economy's future. “To me, these are the investments that we’ve got to be making in the future. These are the good jobs that are going to be created from young people going to school. Today, our college graduates earn 85 percent more on average than a worker with a high school diploma.”
With the cost of college tuition rising, paying for college could become that much more difficult, something Hagan says must be avoided. “Right now, our average college graduate in North Carolina owes $23,000 in student loan debt. I’ve talked to some young people that are married, they have $90,000 in student loan debt. So when these people are out there getting ready to buy their first home, buying a car, starting a business, this is a huge debt burden hanging over their head.”
Hagan says it's the responsibility of Congress to find a long-term solution to the pending increase. “I think Democrats and Republicans need to be sitting at a table, we need to negotiate, and we need to figure out from a long-term perspective what we can do to solve these fiscal issues and not do these short-term extensions.”
Hagan favors a plan to keep the lower rate for two more years, which would give Congress more time to find a concrete long-term solution.