HARRISBURG, PA--(Marketwired - June 24, 2013) - State Treasurer Rob McCord wrote to each member of Pennsylvania's congressional delegation today, urging them to pass legislation that will keep student loan interest rates low.
Unless Congress acts by June 30, the rate for federal Stafford higher education loans will double from 3.4 percent to 6.8 percent. The increase would affect future loans -- those signed after July 1.
The text of McCord's letter follows.
June 24, 2013
One week from today -- absent Congressional action -- approximately 400,000 Pennsylvania students may find it more difficult to afford their dream of a higher education. They will certainly find it costlier.
It is a sad reality that Pennsylvania students graduate with the second highest average student loan debt of any state in the nation. Allowing interest rates on subsidized student loans to double will compound this financial hardship, and it may put higher education beyond the reach of thousands of students.
I ask you to exhibit real bipartisan leadership in the coming days, so rates on federally-subsidized Stafford loans do not increase 100 percent (to 6.8 percent from the present 3.4 percent). An inability to resolve this issue is unconscionable, and it is detrimental to Pennsylvania's future.
Pennsylvania students who assume these loans after July 1 should not be made to suffer the consequences of gridlock in Washington. They should not be made to endure an average of $956 each in additional costs. If you apply that rate to the nearly 400,000 students who may be affected, that is $382 million that may be removed from Pennsylvania's economy over the next 12 years -- money these students could have used to buy a first home, start a family, or save for retirement.
Subsidizing these loans is an investment in our future. As elected officials, we should strive to make higher education in any form more affordable and more accessible to anyone who wishes to pursue it.
I hope you will vote in the interests of our students, and I implore you to ask the same of your Congressional colleagues.
Robert M. McCord
Pennsylvania State Treasurer
For more information, visit www.patreasury.gov.