Subsidized Stafford Student Loan interest rate freeze benefits AS college students
WASHINGTON, D.C. — Congressman Faleomavaega reports that with the passage of H.R. 4348, the Surface Transportation Extension Act of 2012, the U.S. Congress successfully agreed upon a stopgap measure to prevent an increase in student loan interest rates.
Congress passed the bill last Friday, effectively preventing a scheduled increase on July 1, 2012 that would have doubled the interest rates on Subsidized Stafford Loans from 3.4 to 6.8 percent. Immediately after passage, President Obama signed the one-year extension into law.
Established through the William D. Ford Federal Direct Loan (Direct Loan) Program, Subsidized Stafford Loans are low-interest loans for students who demonstrate financial need to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. To determine eligibility, participating colleges will review the student's results of the Free Application for Federal Student Aid (FAFSA) to decide the students' loan limit.
Nationwide, more than 7 million low- and middle-income students use the subsidized loan distributed by the U.S. Department of Education to help pay for college. The interest rate freeze is expected to save each student an average of $1,000 in extra financing fees.
“I am pleased to share with our students and families in American Samoa that with the passage of this bill, eligible students in our Territory will be able to save thousands of dollars in financing their college education," Faleomavaega stated.
"I thank my colleagues in the U.S. Congress for their diligent efforts in making sure that students across the nation can maintain favorable interest rates that will enable them to get a head start on their post-college careers and pay down debt."
Source: Cong. Faleomavaega's office