Braley introduces bill to keep student interest rates down

Congressman Bruce Braley has introduced a bill in the U.S. House that aims to keep interest rates down on student loans.

The current interest rate for a federally subsidized Stafford loan is 3.4 percent. On July 1, that rate will double to 6.8 percent unless Congress takes action.

Students interviewed Wednesday said they were in favor of putting a cap on subsidized Stafford loan interest rates.

Iowa college graduates have the third highest student debt total in the nation. Iowa's average student loan debt for graduates of public and private colleges and universities was nearly $30,000 in 2010.

"I think it's a great idea to keep a cap on interest rates. Especially being a college student, you want to come into school knowing what you are expected to pay, especially what you are going to pay after you graduate," said Mariah Cary, a student at Mount Mercy University.

"I love the idea of keeping it capped. The lower interest rate I can get, the more money I will have in the future and the more I can contribute," said Mount Mercy student Adam Kaefring.

In 2007, Congress passed the College Cost Reduction and Access Act, a bill that lowered loan rates from 6.8 percent to the current 3.4 percent. On July 1, that act will expire and bump interest rates back up if nothing is changed, which would mean that a student taking out the maximum $23,000 in Stafford student loans would pay an additional $11,000 dollars on a 20-year repayment period.

"It's a huge leap and sometimes it's hard to understand until you see it on paper and you do see the numbers," said Cary. "Especially with tuition being so high, that's huge, that's huge for someone paying for their education."

"A lot of people can get housing loans for less than what I initially got student loans for, and that's frustrating for me because housing loans and different loans you take out from lenders, you can actually default on. With my government student loans I can't default on them," said Kaefring.

On Thursday and Friday, Braley will host forums at colleges and universities to focus on employment and student debt. This bill would just put a cap on interest rates; it has no effect on the rising costs of tuition.