US Senator Elizabeth Warren and Representative John Tierney rallied Northeastern University students Monday to speak out against a looming interest rate hike on student loans.
If Congress fails to act by July 1, the rate on federally subsidized Stafford loans, need-based funds for undergraduates, would double from 3.4 to 6.8 percent.
With debate over student loan legislation in Congress heating up, Warren and Tierney urged students to put pressure on their representatives to support bills that would halt the increase. They highlighted their own Bank on Students Loan Fairness Act, which Warren recently introduced in the Senate and Tierney cosponsored in the House.
The bill would allow college students who take out new Stafford loans to pay an interest rate of 0.75 percent. That is the same rate banks pay to the Federal Reserve for short-term loans.
“Right now, the US government is out there investing in large financial institutions, offering them money every single night [for] three quarters of 1 percent, and yet our students, if the government doesn’t do something, will be paying nine times that much,” Warren said to an audience of about 70 students and staff at the Northeastern Visitor Center.