Friday morning, President Barack Obama (pictured far right) was flanked by college students from around the country as he urged Congress to address a doubling of government-supported student loan rates set to go in to effect July 1. Similar to a push the President made last year, the current interest rates will balloon from 3.4 to 6.8 percent based on the findings of a House-passed bill.
The President has already threatened to veto the House bill, which seeks to connect the loan rates with the fluctuating state of the market. Naturally, congressional Republicans see their plan as a cost-saving and effective measure and differ in a variety of ways from the President’s plan. One of the more clear contrasts is that under Obama’s plan, students will borrow and pay back loans at a locked-in rate; the GOP wants to treat student loans similar to an adjustable mortgage with rates rising every year.
According to a 2012 White House report, regarding the threat of interest rates rising for the Stafford loan, it was reported that 1.5 million African Americans benefited from the federal loan program.
But how many African Americans are in college debt?
The Center for American Progress wrote last fall that 81 percent of Black students and 67 percent of Latino students graduate college in debt. The Center also reported that student debt sits at $1 trillion.
Still, House Republicans are hoping to enact the bill in order to shrink the federal deficit to the tune of $4 billion in 10 years. The Obama administration contends that raising taxes on the loan rates is the wrong way to address the deficit gap.
With the backing of Senate and House Democrats, the President looks to ultimately ensure that the 7 million students who rely on federal student loans will not face staggering rates in an unpredictable economy that already doesn’t reward college graduates with the promise of jobs.