In this political — and Facebook slacktivist — climate, you might think we're all just about over signing petitions. But the consumer group U.S. PIRG on Tuesday delivered 130,000 letters to Congress. The issue at hand: A potential hike in federal student loan interest rates.
CBS MoneyWatch reports that the interest rate on federal subsidized Stafford student loans — given to borrowers who file the Free Application for Federal Aid (FAFSA) and report low to moderate incomes — may soon jump to 6.8 percent, matching the interest rate on federal unsubsidized Stafford loans, which have no income restrictions. Currently subsidized loans carry a 3.4 percent rate; this jump will double that, and cost borrowers an average of $5,000 extra over the course of a 10-year term, according to U.S. PIRG.
The increase is planned for July 1, 2012. U.S. PIRG says nearly eight million students borrow subsidized Stafford loans each year. Congress could still act to stop the rate hike (President Obama has proposed carrying forward with the current interest rate for one more year). Keep your fingers crossed.