With federal student loan interest rates set to double in July, President Barack Obama is urging Congress to draft legislation to freeze them. 

On July 1, student loan interest rates will increase from 3.4 percent to 6.4 percent, according to a White House report. This increase would affect 7.4 million students nationally, 163,427 of which are Wisconsin college students. 

A statement from the White House said Obama is calling on Congress to put forward legislation to stop interest rates from doubling. The statement said tuition and fees measured in constant dollars have more than doubled throughout the past two decades, and 2010 graduates who took out loans left college owing an average of more than $25,000. 

White House spokesperson Josh Earnest said during a press call Monday that Obama is working with Congress to keep interest rates down and spare working Americans this added cost. Earnest said if the interest rates stay the same, the estimated cost to taxpayers would be $6 billion and would add, on average, $968 per borrower over the life of a loan.
Cecilia Mu?oz, director of the Domestic Policy Council, said the president is asking Congress to reward students’ hard work and responsibility.
 

“By keeping interest rates on student loans low, more Americans can get a fair shot at an affordable college education, the skills they need to find a good job and a clear path to the middle class,” Mu?oz said.

She added if we are going to be on the strongest possible economic footing, the country has to make sure college education is affordable.

Michael Hintze, the Wisconsin State Coordinator for Tea Party Patriots, said Obama’s tactics for addressing student debt did not quite match the White House’s portrayal of them. 

“This is another gimmick to appeal to this demographic,” Hintze said. “Another attempt to buy the college vote. Not that college students don’t struggle, but everybody has got to share the pain.”

Still, Mu?oz said this is not just a push to get younger voters and is an issue of national importance. He said making sure college remains affordable is something that has been talked about for a long time and is important to the country’s economic future.

While the president is campaigning for keeping interest rates low on general subsidized loans, his current budget plan for 2013 does increase rates on Perkins loans, which ease financial burdens from college tuition. 

“That is being revitalized and re-looked at with an infusion of resources. We see it as a completely separate program than the federally subsidized loans,” Mu?oz said. 

Mu?oz added increasing the Perkins loan interest rate is part of a broader strategy to get universities to be more cost contentious.

Christian D’Andrea, education reform policy analyst for the free market think tank
The MacIver Institute, said just freezing Stafford loans would be a temporary solution to a bigger problem.

“Extending the lower 3.4 percent rates on a temporary, reviewable basis is a start toward making things better,” D’Andrea said. “But this proposed freezing of the Stafford rates would be a band-aid where a trip to the emergency room is due.”