This past July 4th our nation celebrated its independence as many working families gathered to watch parades and fireworks that celebrate a country predicated on endless opportunity. For centuries, people have flocked to America, where we dream that no matter the circumstances of birth, anyone can work hard and achieve a better life.

Yet for millions of students and their families who depend on loans to pay for college, the ladder of opportunity was steeper this July 4th than before. Because of inaction last week, this month the interest rates on federally subsidized student loans doubled for more than 7 million low- and middle-income college students.  This expensive increase could cost the average student an extra $4,000 to gain a degree.

As millions of families continue to prepare financially for the academic year, let’s examine the current proposals to lower borrowing costs for students and alleviate the burden on America’s future.

• President Obama proposed tying the borrowing rate on student loans to the 10-year Treasury bond rate plus an extra fee. While this would lessen the increase in borrowing costs in the short term, the average interest rate over the next 10 years would be 6.2%, a far cry from the previous 3.4%.
• Republicans in the House passed a plan to also tie the borrowing rate to the 10-year Treasury bond plus a 2.5% fee, but the Republican plan has no cap on how high the interest rate may rise and it does not lock in the rate for the life of the loan, allowing borrowing costs to change each year. The plan uses higher student interest rates to reduce the deficit. It is subject to a presidential veto threat and is dead on arrival in the Senate.
• Democrats in the Senate have largely coalesced around a proposal to retroactively extend the current 3.4% interest rate for one year. While this bill would be a good option for students, it is expected to fail in the face of Republican opposition when it comes to a vote this Wednesday.
• With Senate leaders searching for a compromise, a bill has been proposed by six senators to tie the loan to the Treasury bond rate plus a 1.85% fee.  However, the bill does not cap borrowing rates for individual loans and was not met with enthusiasm by Democratic leaders. 
• Finally, former college professor Sen. Elizabeth Warren (D-Mass.) has introduced a bill that would tie the interest rate on student loans to the rate banks receive from the Federal Reserve. This proposal, which would lower rates to .075%, has been endorsed by 28 university presidents and has gained almost a half-million signatures of support through online petitions. Sen. Warren’s legislation, which is the first bill she has written in Congress, would make borrowing for higher education dramatically more affordable.  

In fact, Campaign for America's Future (CAF) writer Dave Johnson pointed out in a blog post working families support 2:1 passing Sen. Warren’s bill to lower student interest rates to 0.75%, including 65% of Democrats and 56% of Republicans.

It’s pretty clear working families are united in making college affordable and accessible. Tell Congress what you think. 

Johnson writes:

There are things you can do to let your senators and representatives know that you want student loan rates cut, not doubled:

CALL!!!! Click here for numbers to call: Stop Student Loan Rates From Going Up