White House officials: Stafford Loan rates to double without action

Student loan debt will be on the agenda when President Barack Obama stops at the University of Iowa Wednesday.

Passing $1 trillion, U.S. student loan debt has surpassed credit card and auto loan debt. Average student loan debt tops $25,000 nationally, up 25 percent in 10 years. Iowa ranks third in the nation for average student loan debt, according to one 2011 study, which put average debt for graduates of Iowa's public and private universities and colleges in 2010 at $29,598.

During stops this week at campuses in North Carolina, Colorado and Iowa, Obama will talk about his call on Congress to support legislation to stop Stafford Loan interest rates from doubling in July. That increase would affect more than seven million borrowers and result in an average $1,000 in added debt per borrower, White House officials said.

What's the Issue?

Interest rates for borrowers of federally-subsidized Stafford Loans will double, from 3.4 percent to 6.8 percent, on July 1 if Congress does not act to fund the program.

Iowans who are Stafford Loan borrowers

255,404

Estimated average cost per Iowa borrower over the loan life, if the rate doubles

$993

Total cost across the state

$253,616,172

What's on the table now?

Bills introduced in both chambers in January aim to extend a 2007 measure with the lower interest rate for one more year, but they are unlikely to gain traction in Congress, according to the Chronicle of Higher Education.

What does the other side say?

Ending federal funding that maintains the lower rate would save taxpayers more than $6 billion a year, Republicans say. They say Obama's policies have not kept tuition or unemployment low for young people.