NY Congressman Rails Against Student Loan Rate Hike

Jul 3, 2013

Credit WAMC/Allison Dunne

New York Congressman Sean Patrick Maloney appeared at a community college in Orange County today, calling for a three-pronged approach to the student loan crisis.  Interest rates on a type of federal student loan doubled July 1, and Maloney wants to reverse that —   for starters.

After Congress failed to act before a July 1 deadline, interest rates on federally subsidized Stafford student loans doubled Monday, from 3.4 percent to 6.8 percent for students applying to college for the 2013-14 school year. Democratic Congressman Sean Patrick Maloney visited SUNY Orange at Newburgh to say such a rate cannot stand.

Ian Ceccarelli is a Warwick resident who attends George Washington University in Washingon, D.C. He is an intern in Maloney’s office.

He says the rate increase affects him, and he will have to pay back more money than originally planned.

House Republicans, meanwhile, blame Senate Democrats and President Obama for remaining on the sidelines and allowing the rates to double. The Republican-controlled House passed the Smarter Solutions for Students Act, tying interest rates on Stafford loans to high-yield 10-year Treasury notes plus a 2.5 percent premium. Maloney says the 2.5 percent is too much. Asked whether he were willing to compromise, he responds:

He points out that President Obama has proposed a premium of less than one percent.

Vinnie Cazzetta is vice president for institutional advancement at Orange County Community College.

In summary, Maloney sees the student-loan issue as three-tiered.

He says he is working with U.S. Senator Kirsten Gillibrand, a New York Democrat, on the refinancing plan and would like to see a rate around 4 percent.

According to a report from the congressional Joint Economic Committee, for the Class of 2011 in New York State, six out of 10 students graduated with debt, and the average debt is more than $26,000.