SALT LAKE CITY — Utah's college students would lose out on a combined savings of more than $93 million if student loan interest rates double in July, according to figures released Monday by the White House Press Office.
According to the press office, 93,864 subsidized Stafford loan borrowers in Utah have saved an average of $995 over the course of their loans, thanks to a provision in the College Cost Reduction and Access Act. That provision was passed in 2007, reducing interest rates from 6.8 percent to 3.4 percent, but is set to expire June 30.
President Barack Obama has repeatedly urged Congress to extend the provision and on Monday, assumed Republican presidential nominee Mitt Romney stated his support for a continuation of the law. Romney's comments came on the same day The Associated Press reported that more than half of young college graduates are unemployed or underemployed.
David Feitz, executive director of the Utah Higher Education Assistance Authority, said the affected loans represent only a portion of the total student loans in the country. He said there are a number of political and economic barriers that may keep Congress from acting on the sun-setting provision.
"To keep the interest rates low, it does require a significant financial investment from the federal government," Feitz said.
Feitz said Utah students have the least amount of student loans in the nation, due in large part to the low cost of tuition at Utah schools. But in recent years debt has been on the rise.
Utah State University director of Financial Aid Steven Sharp said the average student debt at USU has increased $2,000 each year for the past four years. He said last year the average student-loan debt at graduation for a USU student was $17,000, compared with the national average of $25,000.
Sharp did not have exact numbers for other Utah schools, but said their figures are comparable.
"We're all in the same ball park," he said.
Unless extended by Congress, interest rates for new undergraduate subsidized Stafford loans would return to the full 6.8 percent. Existing loans would be unaffected, Sharp said.
Copyright 2017, Deseret News Publishing Company