Hartford — U.S. Rep. Joe Courtney, D-2nd District, said Tuesday that he thinks public outrage eventually will compel more Republicans to support his legislation to stop the interest rate from doubling on future federally subsidized student loans.
“There’s some disbelief that people have when they hear that rates are going to double overnight,” Courtney said at a news conference in the state Capitol with Rep. Chris Murphy, D-5th District.
On July 1, the interest rate on new Stafford Loans offered to low- and moderate-income college students is scheduled to jump from 3.4 percent to 6.8 percent when a 2007 law expires.
Courtney has introduced a bill in the House of Representatives to keep the subsidized loan rate at 3.4 percent indefinitely. It has 109 co-sponsors.
But as keeping the lower rate is projected to have a $4 billion annual cost for the federal government, Courtney is facing a challenge in rounding up the 218 votes needed to pass the bill.
Courtney said he anticipates more congressmen will come to his side as the deadline approaches.
“I think the closer we get to July 1, the public realizes that at a time when 30-year mortgages are 4 percent and the Federal Reserve Board is lending to the big banks at almost zero percent, that suddenly students are going to see their rates go from 3.4 percent to 6.8 percent, it is going to be unacceptable,” Courtney said.
“The power of public opinion is going to weigh heavily on this issue as it gets closer to the moment of truth,” he added.
An estimated 8 million college students would be affected this year if the rate doubles.
Murphy, who is running for the U.S. Senate, predicted that parents “are going to have a rude awakening when they discover that all of the sudden the cost of their son or daughter’s education in the fall is going to skyrocket if we don’t pass this legislation.”
The congressmen said Senate Democrats are pushing a softer version of the bill that would extend the 3.4 percent rate for one year.
Subsidized Stafford Loans are backed by the full faith and credit of the federal government and thus carry a lower rate than borrowers can obtain from private lenders. A 2007 law cut the subsidized rate from 6.8 percent to its current level for four academic years.