RYAN SCOTT OTTNEY
PDT Staff Writer
U.S. Sen. Sherrod Brown (D-OH) announced Thursday new legislation that would prevent an increase in federally-subsidized Stafford student loans. Brown said the legislation — called the “Stop the Student Loan Interest Rate Hike Act of 2012” — would maintain the current interest rate, which is set at 3.4 percent, and prevent a hike to 6.8 percent that is scheduled to begin July 1.
Brown co-sponsors the bill with democrat Sens. Jack Reed of Rhode Island and Tom Harkin of Iowa.
He explained that in 2007, the College Cost Reduction and Access Act cut the fixed interest rates on newly-subsidized Stafford loans for undergraduate students to 3.4 percent over a set period of time, but the interest rates on any new subsidized Stafford loans will double to 6.8 percent on July 1 unless Congress takes action. The rate increase would not apply to loans that are currently in repayment or that have already been disbursed, he said.
According to Brown, student loan debt has reached nearly $1 trillion, and now exceeds credit cards and auto loans. The average Ohio student graduates from a four-year college or university with nearly $27,000 in debt and the last thing we should be doing, he said, is adding more to their costs.
“Half of college graduates are either jobless or under-employed in positions that don’t fully use their skills and knowledge. It’s clear we need to do more to educate young people, and we need to do more to connect them to businesses looking to hire,” Brown said.
He said that allowing interest rates to double would be a step backward, and called it “a one-two punch to students who are already struggling to afford rising college costs.”
According to Brown, more than 382,000 students in Ohio would be forced to pay thousands of dollars more each year in college loan costs unless Congress acts to block the interest rate from doubling. This includes 3,169 loan recipients at Shawnee State University in Portsmouth, and 14 at Elite School of Cosmetology in Portsmouth.
Between the two schools, Scioto County students receive $12,201,723 worth of federally-subsidized Stafford loans.
“We are concerned about any changes to student loans because they are so critical to helping students and families access higher education,” said Dr. Rita Rice Morris, Shawnee State University president. “Accessibility is a vital part of the SSU mission. We believe that a college education should be within reach to all who desire it. Keeping interest rates low will help more students achieve their educational goals.”
Brown said his newly proposed legislation would help keep college tuition more affordable for hundreds of thousands of Ohio college students.
“The federally-subsidized Stafford loan available to students is often their main pathway to college, and rates will double unless we do something to stop it,” Brown said.
Ryan Scott Ottney can be reached at 740-353-3101, ext. 235, or email@example.com.