KINGSTON, RI – In an effort to keep student loan interest rates low and help families pay for rising college costs, U.S. Senator Jack Reed (D-RI) today joined University of Rhode Island (URI) President Dooley and URI students in support of legislation to prevent interest rates on subsidized Stafford student loans from doubling on July 1, 2012 – 89 days from today.

Stafford federal subsidized loans have been issued to more than 7 million low - and middle - income undergraduate students, including more than 36,000 Rhode Islanders.  It is estimated that more than 7,600 URI students are using a subsidized Stafford loan.

The current rate is 3.4 percent, but that rate will double to 6.8 percent on July 1, 2012 unless Congress takes action.  That jump could mean an increase of about $5,000 over a 10-year repayment period for borrowers who rely most on federal student loans.  Students in their first and second years are likely to be hit the hardest by a possible federal rate hike.

Since 1985, the cost of a college education has increased by 559 percent.  The increase in college costs have caused the amount of student loan debt held by Americans to spike and for the first time in U.S. history the national student debt burden has surpassed $1 trillion – more than credit card debt.

“Keeping student loan interest rates low is an investment in both individuals and America’s global competitiveness,” said Reed.  “As college costs continue to rise and more students take on loans to earn a degree, the Student Loan Affordability Act will provide relief for middle-class families saddled with student loans.”  Reed also noted that student loan interest rates are only one piece of the college affordability puzzle and that more must be done to drive down college costs to keep America competitive. 

Today’s event was held at URI’s Kingston campus.  In 2011, The Wall Street Journal’s “SmartMoney Magazine” ranked URI number one in value for higher education in New England and thirteenth best value among public and private institutions nationwide.  This ranking assessed public and private colleges on their ability to deliver the best return on investment and sought to quantify the long-term value of a college education based on post-graduate salaries.

Earlier this year, Reed introduced the Student Loan Affordability Act (S.2051), to prevent the rate hike and permanently cap subsidized Stafford student loan interest rates at 3.4 percent.  On March 13, 2012, Senator Reed held a  press conference on the lawn of the U.S. Capitol, where he was joined by advocates from U.S. PIRG, Rebuild the Dream, Campus Progress, and college students from across the country in support of his legislation to prevent interest rates on certain student loans from doubling this year.