WASHINGTON - Millions of college students could be in for a shock this summer when the interest rate on a popular federally subsidized student loan doubles unless Congress acts.
On Tuesday, college students delivered more than 130,000 letters to congressional leaders asking them to stop rates from rising from 3.4 to 6.8 percent. The rate increase affects new subsidized Stafford loans, which are issued to low- and middle-income undergraduates. They hope to raise enough awareness to get Congress to stop it.
“I will be put back into buying a house and saving up for my expenses later on in life, and life, as we know, is very unexpected,’’ said Tyler Dowden, 18, a freshman at Northern Arizona University who spoke at a press conference outside the Capitol before the letters were delivered in boxes with “Congress: Don’t Double Student-Debt Rates’’ printed on the outside. “Adding that variable definitely limits my ability to be successful.’’
Dowden said he anticipates graduating with $25,000 in debt, but if the rate increases, he expects to add about $3,500 to that tally. He is studying to be a mental health therapist.
President Obama frequently tells crowds it is important for Congress to stop the increase because one of the most daunting challenges after high school graduation is affording college. His administration has said keeping the rate low would help 7.4 million borrowers save more than a thousand dollars, on average, over the life of the loan.
But canceling the interest rate increase is estimated to cost billions annually at a time when Congress is gridlocked over budgetary and other issues.
With many lawmakers acting on a campaign promise, the Democrat-controlled Congress passed legislation in 2007 to progressively lower the rate to 3.4 percent this school year.
Representative John Kline, Republican of Minnesota who is chairman of the House Education and the Workforce Committee, has said the increase is the “result of a ticking time bomb set by Democrats five years ago’’ and that “simply calling for more of the same is a disservice to students and taxpayers.’’
Jennifer Allen, a spokeswoman for Kline, said in an e-mail that Americans “now face the exact predicament we expected: We must either allow interest rates to rise on student loans, or stick taxpayers with another multibillion dollar bill.’’
With high tuition costs, students are taking on unprecedented levels of debt. College students leave owing an average $25,000 in loans, and student loan debt now surpasses credit card debt.
Some graduates simply cannot keep up with it. A report released Tuesday by the federal judiciary about the courts’ caseload in the government spending year that ended Sept. 30 showed that filings with the government as a plaintiff increased 25 percent, as cases concerning defaulted student loans surged 58 percent, by 1,588 cases.
Senator Jack Reed, Democrat of Rhode Island, and Representative Joe Courtney, Democrat of Connecticut, who spoke at the press conference, said it does not make sense for student loan recipients to face a higher interest rate than homeowners are getting on mortgages or that banks are able to get. The two back legislation that would keep the lower rate, but both acknowledged that in the current political climate it will be challenging to get the measure passed by the July deadline.
The college students said they worry constantly about the debt they are taking on, and that the few thousand extra dollars they would take on in new loans if the rate doubled would affect life decisions.
Samantha Durdock, 19, a sophomore studying government and politics at the University of Maryland, said she wants to go to graduate school after college so she can pursue a career related to international affairs, but she thinks she won’t be able to go immediately with the additional amount she would probably owe. She already expects to graduate owing more than $20,000.
“Right now, if the loans stay how it is, it’s going to be tight, but I could make it doing five years straight in school,’’ Durdock said. “But with the increase I’d probably have to take off.’’