Schumer to block federal student loans from doubling

Posted at: 06/24/2012 1:08 PM | Updated at: 06/24/2012 1:23 PM

U.S. Senator Charles Schumer says he called on Congress to quickly approve a deal which will block student loan interest rates from doubling.

Schumer says the impending deal will go into effect one week from Sunday – July 1 – if action is not taken. The student loan interest rates for federally subsidized Stafford Loans will double from 3.4% to 6.8% for all new loans taken out U.S. students.

Schumer stresses that this will mean thousands of dollars in interest over a 10-month payment period will be added to the cost of attending college.

This will affect the 8 million undergraduates nationally and over a quarter million students in Upstate New York.

The Stafford loans are for students who meet rigorous financial needs and are to alleviate the students – keeping the debt burden off of them – until they have earned their degrees.

Schumer says it is important to note that this does not impact loans that are currently in repayment or that have already been disbursed.

This only applies to those students still attending school after July 1, 2012 that use federally-subsidized Stafford loans – paying higher rates on the new loans, adding to their already stacking debt.

Schumer lays out the details also statewide in regions that will be affected by the tens of thousands.

He says the Rochester-Finger Lakes Region currently has 41,675 students receiving federally-subsidized Stafford loans.

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