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Congress Gets an 'F' on Student Loan Crisis

Congress Gets an 'F' on Student Loan Crisis

Starting Monday, 7 million college students will be forced to pay thousands of dollars more on their loans.

That is, unless Congress passes a bill preventing interest rates on these loans from doubling.

Fat chance.

While you were refreshing SCOTUSBlog or celebrating the death of DOMA, Congress has been trying and failing to prevent interest rates on federal Stafford loans—the most popular form of college funding—from increasing from 3.4 percent to 6.8 percent.

The increase will affect an estimated 7 million students who plan to take or renew loans after July 1. It could force those students to pay as much as $3,834 in additional interest payments over a 10-year period. Congress can still pass retroactive legislation stopping the increase after July 1, but not before causing significant uncertainty for students. The 37 million Americans who are still paying off existing loans won’t be affected. 

“Why are we making it more difficult for kids to start their lives by putting them in hundreds of thousands of dollars in debt before they’re 25?” asks Jasmine Flores, who is starting college in the fall and is livid that she’s facing down more burdensome loans even before she moves into her dorm.

Financial-aid experts are troubled by the likely increase and the congressional stalemate, but say that the student loan system in general is confusing for students and administrators and needs to be simplified.

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