Current and former college students in the U.S. now owe more than $1 trillion in student loan debt. And interest rates on federally-subsidized Stafford Loans are set to double on July 1st, from 3.4 to 6.8 percent, unless Congress takes action.
Vermont’s congressional delegation is speaking out against the planned rate increase.
On Tuesday, Senate Republicans voted against the Democrats’ plan to keep Stafford interest rates down, by increasing taxes on the wealthy.
After the vote, Senator Bernie Sanders spoke out on the Senate floor. "Students are leaving college deeply, deeply in debt," Sanders said. "19,000 students in the state of Vermont are on Stafford Loans. And if interest rates double from 3.4 to 6.8 percent, it will make their current situations, which are very difficult, much, much worse," he said.
Both Democrats and Republicans say they want to extend the low interest rates on Stafford Loans. But they disagree on where the money should come from to make that happen.
Congressman Peter Welch said it was a "solvable problem", and that everything should be on the table.
"You’ve got to put revenues on the table, the Pentagon has to be part of the equation, and our programs," Welch said. "The domestic spending on everything else has to be considered. But when you put everything on the table you have to acknowledge, you know what, we may have to cut here, and that’ll be tough, but we still have to invest in our future," he emphasized. "We can’t not educate our young people. We have to do that."
Welch said he is confident that Congress will find a way to keep interest rates from doubling this summer. But he added that getting there won’t be pretty.