WASHINGTON, June 26 – Citing a major crisis in college costs, Sen. Bernie Sanders (I-Vt.) today urged quick action by Congress to keep student loan interest rates from doubling on Monday.
“If we do not act immediately, the subsidized Stafford loan program will see a doubling of interest rates from 3.4 percent to 6.8 percent,” Sanders said in a Senate floor speech. “That would be a disaster for millions of students and their families in our country. We must not allow that to happen.”
At the very least, Sanders said, the current Stafford loan program interest rate of 3.4 percent must be extended. In the long term, the Higher Education Act should guarantee that students will be able to attend college and not be burdened with crippling loans.
“We have a major crisis in our country today in terms of the high cost of college and the incredible debt burden that college students and their families are facing,” Sanders said. “Our job is to improve that situation, to lessen the burden on students and their families - not to make it worse.”
At a time of growing demand for an educated work force, hundreds of thousands of bright young Americans are unable to pursue higher educations. He cited a Pew study of 18-34 year olds who haven’t completed college and for 48 percent of them a big reason is they cannot afford it. “What sense does it make for a nation not to take advantage of the intellectual capabilities of millions of bright young people?” Sanders asked.
Moreover, he added, millions of people who graduate are saddled with an incredible debt burden. The average debt for a college graduate is $27,200. For those who go to graduate school or medical school or dental school that debt can be many times higher. This horrendous debt burden impacts the lives of young people in many, many ways. It can determine the type of profession they choose.
With a staggering $1.1 trillion in education loans outstanding, the debt load is greater than Americans’ total credit card debt and it is having a significant impact upon our economy. In fact, the Federal Reserve and the Department of the Treasury have both warned that high levels of student loan debt could drive down consumer demand and have negatively impact economic growth.