Americans outstanding student loan debt is $1 trillion and rising. The unemployment rate for new college graduates stood at 9.1 percent in late 2011. Many parents are facing pay cuts or unemployment, so students have had to take out more and more loans to cope with these quickly rising costs. The average borrower graduating from a public or private institution owed an unprecedented $25,250 according to recent figures.
The last thing borrowers need is a three-point hike in interest rates on their federally-subsidized Stafford loans, which is scheduled to go into effect after June 30, 2012. The evidence lies in the fact that delinquency and default rates for student loans have risen sharply.
President Barack Obama took a stand for students when he introduced a packaged to defer the hike.
On Friday, June 29, 2012, the House of Representatives passed the $109 billion transportation funding bill as part of a package that includes a measure holding down interest rates on federal student loans.
The bill, which includes more than $100 billion in funding for highway projects over two years, extends the current 3.4 percent student loan rate for one year at a cost of an estimated $6 billion. The measure passed 373 to 52. All of the members who opposed it were Republicans.
Borrowers can breathe a sigh of relief for this temporary victory. –yvette caslin