WASHINGTON – President Obama called on Congress last week to act soon to prevent a scheduled end to the 3.2% rates on Stafford Loans, which are slated to double to 6.8% July 1.
Legislation passed in 2007 temporarily halved the interest rates for Stafford Loans from 6.8% to 3.2%. If Congress does not act to extend the lower rates by July 1, as many as seven million families could face higher payments.
The move will not only affect millions of credit union borrowers directly but also by setting a market rate for private student loans that are increasingly popular with credit unions and banks.
But Republican House leaders are opposing the President’s call so far because of its cost estimate, $6 billion a year. Republican Rep. John Kline of Minnesota, who chairs the House Education and Workforce Committee, said in a statement that he has "serious concerns" about any plan that "kicks the can down the road and creates more uncertainty."
"My colleagues and I are exploring options in hopes of finding a responsible solution that serves borrowers and taxpayers equally well," he said.
