President Obama Presses Congress on Student Loan Interest

26 April 2012

President Barack Obama spoke about student loans Tuesday at the University of North Carolina, Chapel Hill

This is the VOA Special English Economics Report.

Student loans and the interest millions of Americans pay on them have been getting a lot of attention recently. Student loan payments and interest are a financial reality for men and women in many different kinds of jobs across the United States.

The Department of Education says interest rates for Direct Subsidized Student Loans will double to just under seven percent on July first. Five years ago, Congress passed a measure that lowered interest rates for the government loans. But the law is set to expire.

The president has called for the lower, three point four percent interest rate in his new budget. But if Congress does not act, new student borrowers will pay more. Other borrowing-related costs will also go up. The Obama administration says this will cost each student borrower an additional one thousand dollars on average.

Higher education in the United States is costly. The Department of Education says the average yearly cost of attending a public college was about twelve thousand eight hundred dollars in twenty ten. The total for private schools was over thirty-two thousand.

The Federal Reserve Bank of New York collects financial information. It says Americans owed eight hundred forty-five billion dollars in student loans last year. Some reports say the amount is now near one trillion dollars.