May 31, 2013
Today President Obama is joining college students at a White House
event launching a new push to keep student loan rates from doubling in
July. Among the various plans offered, Sen. Elizabeth Warren’s plan
is the most affordable for students, while the Republican plan tries to
“make money” off of students using fluctuating “market rates.”
Student Loan Rates Set To Double
Student loan rates for more than 7.4 million students with federal
“Stafford loans” are scheduled to double July 1 from 3.4 percent to 6.8
percent if nothing is done. The amount of student loan debt is massive.
U.S. students currently owe almost $1.1 trillion in student loan debt, and this amount is increasing at a rate of about $2,853.88 per second. This amount is greater than total credit card debt currently owed. Thirty-five percent of people under 30 are near default on their student loans, and approximately 32 percent of those are between the ages of 30 and 49.
In 2005 average student loan debt was just over $17,000.
By 2012 it was above $27,250. This was a 58 percent increase in just
seven years. This debt creates a drag on the U.S. economy – home
ownership and car ownership have declined for young households.