Interest rates on some student loans may double in July
When a graduate leaves college in Colorado with a bachelor’s degree, he or she also leaves with about $23,000 in student loan debt. That figure is sure to climb if the interest rates for subsidized Stafford loans go from 3.4 percent to 6.80 percent in July.
Student government leaders at University of Colorado Denver met with U.S. Senator Michael Bennet to talk about the challenges that may come along with an interest rate hike. Stafford loans have been issued to approximately seven-million undergraduate students – about 166,000 of them are in Colorado. At CU Denver and the Anschutz Medical Campus, 8,544 undergraduate students have Stafford loans.
Bennet told student leaders that higher education is not receiving enough attention at the federal level.
“I accept not everyone will go to college, but it has to be their choice not to go,” said Bennet. “If they can’t afford to go, that’s not their choice.” Bennet added the default rate on student loans in Colorado is third in the nation at 11 percent and conceded that number might rise if interest rates double in July.
Some students are also concerned. Student advocate Gordon Hamby used to be an IT manager and decided to change his career path so he returned to college.
“I am a year from graduation and I am on an uphill climb.” said Hamby. He worries about the Stafford loan interest rate doubling. “When I get to graduation, will I be able to continue the advocacy work I started here?”
Bennet also heard from a fifth year student at CU Denver who will graduate with $50,000 in student loans despite full-time work and a full-time class load.
CU Denver’s Student Government Association passed a resolution asking Congress to stop the interest rate increase on Stafford loans and asked Bennet to take the resolution back to his colleagues in Washington, D.C.