Interest rates on the most commonly used federal student loans will double July 1 without action by the U.S. Congress.
Interest rates on Stafford Loans would go up from 3.4 percent to 6.8 percent for the 2013-14 school year. Over 20,000 college students in New York State's 17th District alone use Stafford loans.
Congresswoman Nita Lowey joined Dominican College President Sister Mary Eileen O'Brien and Pace University President Stephen Friedman in a discussion Monday to call for Congress to pass legislation that would either keep rates where they are or lower them.
"If Congress sits on its hands, allowing interest rates on these popular federal loans to double, it will cost students and cost our economy," Lowey said. "That is why I am calling for the immediate passage of legislation to prevent these rates from doubling. We must do all we can to help keep an affordable college education within reach."
Lowey is co-sponsoring two related pieces of legislation. One bill would lock in the current interest rate of 3.4 percent. Another would make interest rates the Federal Reserve provides for banks, which can be as low as 0.75 percent, available to students.
"Currently over 1,500 students, 74 percent of our population, are assisted by federal loans," O'Brien said. "If you put all federal loans together, subsidized and unsubsidized, the average is about $11,000 per student, so you can see it's extremely important to colleges like ours. I'm sure it is to all colleges.
"Our greatest concern was articulated by Nita. Doubling the rate from 3.4 to 6.8 would be a huge added difficulty to our student body."
Freidman said there would be a similar impact at Pace.
"Last year, more than 4,600 Pace students and their families borrowed low-interest federal loans to help realize their dreams of a college education," Friedman said. "These are outstanding young Americans who are preparing to contribute to their industries, communities and the progress of the nation. Youth unemployment is still a major problem in America. The correlation between rate of employment and college graduation is stunningly high. We hear employers say they can't find enough well-educated Americans to fill jobs.
"Under those circumstances, (letting rates go up) is just plain bad policy. It makes no sense at all. It is not in the national interest and it is certainly not in the interest of young Americans."
O'Brien said nearly half of students who leave Dominican before graduating report doing so for financial reasons.
"They are satisfied with the education and things of that nature, but the costs are prohibitive," O'Brien said.
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