VA Student Leaders Urge Congressmen Rigell, Wolf to Stop Student Rate Hike
Leaders of the Virginia Young Democrats joined student leaders from George Mason University and Old Dominion University this morning on a conference call urging Congressmen Rigell and Wolf to end the broken politics of Washington and stop student loan rates from doubling.
"In just two weeks, Virginia students and families will see their loan rates spike unless Congressmen Wolf and Rigell take action and stop the rates from doubling,” said James Lewis, Public Affairs Director for the Virginia Young Democrats. “Virginians know education is the key to growing our economy, but Congressman Rigell and Wolf’s refusal to fix this problem shows that they are out of touch with Virginia’s values. It is time for Congressmen Rigell and Wolf to show some leadership, fix this problem, and stop putting the dysfunctional politics of Congress over Virginia’s middle class families."
If Congress fails to act, loan rates will double for students across the Commonwealth on July 1st, and after that it could get worse: under the “Students Pay More Act” supported by Congressman Rigell, Virginia students and their families could see their loan rates spike as high as 8.5 percent. According to the Associated Press, this proposal supported by Congressman Rigell “would cost students and families heavily.”
“Hampton area students like myself are struggling with debts and loans because our Congressman, Scott Rigell, voted to make students pay more,” said Terrell Kingwood, a student at Old Dominion University. “Now the clock is ticking. Hampton area students want our Congressman to make education affordable and accessible and fix the problem of skyrocketing student debt. But when Congressman Rigell sides with brokenWashington politics over Virginia’s middle class families, it’s impossible to trust Congressman Rigell to look out for us.”
A recording of the call is available upon request.
Student Loan Rates Set to Double on July 1. “Incoming college freshmen could end up paying $5,000 more for the same loans their older siblings have, if Congress doesn’t keep interest rates from doubling. If that sounds familiar, it’s because the same warning came last year. But now the presidential election is over, and mandatory budget cuts are taking place. That makes a deal elusive to stop interest rates from doubling on new loans before a July 1 deadline.” [WAVY, 3/28/13]
Congressman Rigell Voted to Raise Student Loan Interest Rates Up to 8.5 Percent. In May, Rigell voted for the House Republican student loan proposal. According to the Associated Press: “Under the GOP proposal, student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. For instance, students who receive subsidized or unsubsidized Stafford student loans would pay the Treasury rate, plus 2.5 percentage points. Using Congressional Budget Office projections, that would translate to a 5 percent interest rate on Stafford loans in 2014, but the rate would climb to 7.7 percent for loans in 2023. Stafford loan rates would be capped at 8.5 percent, while loans for parents and graduate students would have a 10.5 percent ceiling under the GOP proposal.” [H.R. 1911, Vote #183, 5/23/13; Associated Press, 5/16/13]
Under the “Students Pay More” Act, Graduates Would Pay Almost $5,000 More in Student Loan Interest. The Associated Press reported: “In real dollars, the GOP plan would cost students and families heavily, according to the nonpartisan Congressional Research Service. The office used the CBO projections for Treasury notes’ interest rates each year. Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 percent. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000.” If the Republican plan were implemented, college graduates would pay $4,881 more in interest, compared to the current rate. [Associated Press, 5/16/13]
59 Percent of Virginia Students Graduate with Debt. The Project on Student Debt reported that 59 percent of Virginia college students graduate with debt, with an average of $24,717 per borrower. [Project on Student Debt, accessed 6/06/13]
For Immediate Release, June 18, 2013
CONTACT: Jesse Ferguson (202) 485-3440