College Loan Rates Likely Doubling Monday, Affects Thousands of Marylanders

By Sonia Su

Interest rates on college loans are likely to double for more than 100,000 Maryland college students on Monday, jumping from 3.4 percent to 6.8 percent without congressional action.

"With immigration taking center stage on the Senate floor this week, it's unlikely anything will get to the president's desk before July 1 when the rates automatically double," according to U.S. News, which compiles annual college rankings. 

With the average loan debt at about $24,000, students in Maryland would have to pay an additional $95.4 million, or an average $909 more for each student, according to the Baltimore Business Journal, citing figures from Maryland Public Interest Research Group.

On May 23 of this year, the U.S. House of Representatives passed the Smarter Solutions for Students Act, under which the loan rate would be reset every year, depending on the interest rate on U.S. Treasuries, U.S. News states.

However, Congress has not agreed on a plan to address the issue.

One plan supported by Sen. Barbara A. Mikulski, D-MD, of Baltimore would extend the 3.4-percent rate for two years and give lawmakers more time to create a more long-term solution, according to Southern Maryland Newspapers.

President Obama told college students at a Rose Garden ceremony in May that student loan debt forces people to cut back on spending and therefore fueling the economy, according to the Baltimore Business Journal.

"It holds back our entire middle class," he said.

About 57 percent of people with student loans are concerned about being unable to repay them, according to a new study by the Urban Institute’s Opportunity and Ownership Project.

The Washington, DC area is home to several colleges and universities, including The University of Maryland-College Park, Montgomery College and the Universities at Shady Grove.