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In 2007, the College Affordability Plan gradually reduced interest rates from 3.4% to 6.8% on Federal Direct Stafford loans. If allowed to expire on July 1st, the interest rates on the student loans will return to 6.8%. U.S. Representative Mike Doyle (D-PA-14) is calling on Senators Pat Toomey (R-PA) and Bob Casey (D-PA) to pass H.R.4816, known as Stop the Rate Hike Act of 2012.
"This will prevent interest rates on student loans from doubling," Doyle said. "We pay for this by eliminating some of the tax breaks to oil companies who are making record profits right now and generally don't need the assistance from the federal government."
Doyle said keeping interest rates low for students has bi-partisan support, but the method of payment for it doesn't.
"You have a situation like student interest rates, which there's general consensus that it makes sense and that it's a good investment to keep them low," Doyle said, "and they put a pay-for in there that just is something that nobody can vote for."
Doyle said that previous proposals to extend the lower interest rates targeted the Affordable Health Care Act and impacted funding for initiatives like child immunization and mammograms for women.
"Don't march the vulnerable up here and say, 'This is how we pay for it,'" Doyle said.
New data shows that the number one category of consumer debt in the nation is student loans, recently hitting $1 trillion, and topping credit card debt. According to the U.S. Department of Education, 393,584 federal student loan recipients in Pennsylvania will be impacted. If Stop the Rate Hike Act is passed, current and former students from Pennsylvania will save an estimated $397 million.
Erin Weaver, originally from York, is one of those Pennsylvania students who heavily rely on loans. The Villanova English major says she anticipates graduating with about $90,000 in debt from her student loans.
"I really need all the help I can get," Weaver said.
