Murray comes out against potential student loan rate increase

Murray comes out against potential student loan rate increase »Play Video
SEATTLE -- A fight over student loan interest rates came to the University of Washington on Friday, as outraged students spoke to Washington Sen. Patty Murray about a plan that could soon double their interest rates.

As if rising tuition costs weren't enough to frustrate college students and their families, now the interest rates on the loans they use to pay for that education could soon drastically increase. Unless congress takes action, the rates will double on July 1.

UW sophomore Kika Kaui said she'll owe $40,000 by the time she graduates.

"$40,000 is crushing my peers and myself," she said. "When we add interest rates, we're not just paying for education. We have to pay for fear, anxiety for our own futures."

Half of all UW students use loans to pay for tuition.

"The national student debt burden has surpassed one trillion dollars. That is more than the total amount of credit card debt," Murray said.

President Obama wants Congress to keep a temporary freeze on interest rates at 3.4 percent. If that doesn't happen and the interest rate goes up, it could cost each student and extra $1,000.

Obama encouraged people this week to Tweet "Don't double my rate" on Twitter. Thousands did, but on Friday Obama threatened to veto a bill passed by the House that would freeze the rate by taking money from a healthcare fund for women.

"That's not how we should be moving forward on an issue as critical as this," Murray said.

House Republicans have said the estimated $6 billion annual cost of extending low-interest rates for student loans isn't affordable without offsetting cuts but that they are still deciding whether to support a temporary extension.

Presidential candidate Mitt Romney has also come out in favor of keeping the rates low.

"I support extending the temporary relief on interest rates for students," Romney said on Monday, though he did not offer specifics on how the extension should be paid for or how long it should last. He said he supports the extension because of "extraordinarily poor conditions in the job market."

It's not just students who worry about the potential increase, either. Penny Lara's daughter is a senior in high school who plans on getting an engineering degree from the UW.

"It is scary to hear news like that," Lara said.

The uncertainly is making thousands of families nervous, and Congress has just a few weeks to settle the issue before interest rates climb to 6.8 percent.