WASHINGTON, DC – President Barack Obama is set to deliver his weekly radio address and then launch a tour of several college campuses next week urging Congress to prevent the interest rate on student loans from doubling in July. 

On January 31st, U.S. Senator Jack Reed (D-RI) introduced the Student Loan Affordability Act (S.2051), to prevent the rate hike and permanently cap the subsidized Stafford student loan interest rate at 3.4 percent.

The current fixed interest rate on Stafford federal subsidized loans, held by over 7 million undergraduates, is 3.4 percent, but that rate will double to 6.8 percent on July 1, 2012 unless Congress takes action.  That increase could mean an increase of about $5,000 over a 10-year repayment period for borrowers who rely most on federal student loans.

“A college education is an important investment for both individuals and America’s global competitiveness.  It is in our national interest to try and keep student loan rates low.  The Student Loan Affordability Act will provide relief for middle-class families saddled with student loans,” said Senator Reed.  “Congress has a July 1st deadline to pass this legislation and prevent this looming rate hike.  I commend President Obama for leading on this issue and strongly backing our efforts.  I will continue to work with the White House, Congressman Joe Courtney, and my colleagues on both sides of the aisle to ensure financial aid opportunities afforded today will also be available to future students.”

Since 1985, the cost of a college education has increased by 559 percent.  The increase in college costs have caused the amount of student loan debt held by Americans to spike and for the first time in U.S. history the national student debt burden has surpassed $1 trillion – more than credit card debt.

Cosponsors of Reed’s bill include: Pat Leahy (D-VT), Al Franken (D-MN), Debbie Stabenow (D-MI), Bernie Sanders (D-VT), Sheldon Whitehouse (D-RI), Mark Begich (D-AK), Tim Johnson (D-SD), Chuck Schumer (D-NY), Dick Durbin (D-IL), Sherrod Brown, Sherrod (D-OH), Amy Klobuchar (D-MN), Jeff Merkley (D-OR), Maria Cantwell (D-WA), Party Murray (D-WA), and Ron Wyden (D-OR).

U.S. Representative Joe Courtney (D-CT) authored the House version of the bill (HR 3826) which currently has 126 cosponsors.