College student loan rates will double next Monday without immediate action by Congress and Iowa Senator Tom Harkin is joining in a last-ditch effort. Harkin, a Democrat, is co-sponsoring a bill being introduced today which would freeze the interest rate for a full year.
“I believe it is unacceptable to try to reduce the deficit by loading more debt on the backs of students and their families that are already struggling to pay for college,” Harkin says. “Stakes are especially high for Iowa. Nearly 72% of Iowa’s graduates have student loan debt, the 4th highest percentage in the nation.”
Without legislative action, student loan rates will jump on July 1st from 3.4-percent to 6.8-percent. Harkin, a Democrat, says the rate freeze bill would give lawmakers plenty of time to come up with a better solution.
“The ball is now in the Republicans’ court but time is short,” Harkin says. “I think we may be even adjourning today or tomorrow for the 4th of July recess, so it’s time to end this hard-line obstruction. Let’s get a one-year extension and let’s get these compromises made.”
Harkin says more than 220,000 Iowans have student loans, with an average of $29,000 in debt, the sixth highest rate in the country. He says another measure is also being considered with the goal of heading off the rate hike, but he’s against it.
“Their so-called bi-partisan agreement would increase student loan rates above what they are right now,” Harkin says. “I can prove that and I’m going to be on the floor showing that with my charts. They’d do away with the interest rate cap. Their interest rate and they way they structure the system, it’s like bait and switch.”
He says the dueling measure would keep interest rates low for a few years, “and then they just skyrocket.” If the interest rates are allowed to double, Harkin says it would add about a thousand dollars, on average, to the cost of paying off each loan.