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By: Associated Press Article
Posted: May 17, 2012

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  • 1.5 MILLION AFRICAN AMERICAN STUDENTS TO BE IMPACTED BY DOUBLING OF FEDERAL STUDENT LOAN INTEREST RATE

    Interest rates on new subsidized Stafford student loans for undergraduates are scheduled to double on July 1, from 3.4 percent to 6.8 percent. Unless Congress acts to stop the increase, more than 7 million students around the countryapproximately 1.5 million African American studentswould see their student loan debt increase. If the interest rate doubles, the estimated average increase in student loan debt for African American students would be more than $1,000 over the life of the loan.

    At a time when going to college has never been more important, it has also, unfortunately, never been more expensive, Education Secretary Arne Duncan said. Families and students are struggling to meet these costs, and there's no reason why we should add to their burden.

    While some African American students are fortunate enough to come out of college debt-free, many are not, John Wilson, executive director of the White House Initiative on Historically Black Colleges and Universities (HBCUs), said. Increasing the student loan rate at a time when America needs a workforce that can compete in this global economy is not smart business. Its simply unfair. Going to college shouldnt be a luxury for few, but a realistic goal for all students regardless of their economic backgrounds.

    In addition to efforts to keep student loan interest rates from doubling, the Obama Administration has taken significant steps to make college more affordable for all students. The Administration is providing billions of dollars a year in aid to needy students through Pell grants and helping students to better manage their debt after graduation with programs like income-based repayment and public service loan forgiveness. The President is also proposing a number of new initiatives to keep college costs from rising, including doubling the number of work-study jobs within five years; making the American Opportunity Tax Credit permanent; and providing new incentives for states and institutions to keep college costs from escalating.

    The U.S. Department of Education and Administration officials are traveling the country holding events to raise awareness about increased student loan interest rates unless Congress takes action soon. Students and their families can join the conversation via twitter hastag #DontDoubleMyRate.

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