Walz Rallies With Students To Keep Loans Low

Press Release

Recent Minnesota State University graduate Moriah Miles has $42,000 in student loans and some decisions to make. "This is causing me to reconsider my next steps," said Miles who faces monthly payments of $300 to $750 per month. She has several job offers but says she's facing the reality of not having a car and having to stay on her parents' cellphone plan. Miles, who is state chair of the Minnesota State University Student Association, rallied with U.S. Rep. Tim Walz, D-Mankato, and other students and faculty at MSU Friday to urge Congress to pass a temporary freeze on student loan interest rates.

If Congress doesn't act, interest rates on government-backed Stafford student loans will double from 3.4 percent to 6.8 percent July 1. The rate increase would cost the average student borrower $1,000 for each year of college over the life of a loan.

Walz said freezing the rate for two years is the first step in a longer journey toward finding ways to reduce tuition costs while providing adequate financial support to colleges and universities. An MSU graduate, Walz said public higher education was affordable when he was in college.

"Because of that I had the opportunity to go out and achieve what we've achieved."

This is our future," Walz said pointing to a group of students standing behind him. "As a nation this is one of the best investments we can make into research, we can make into infrastructure."

Walz said raising student loan rates also will cause graduates to do less consumer spending, slowing the economy. And higher costs for future students will cause more people to delay or skip going to college.

Minnesota college students now graduate with an average debt load of nearly $30,000, the third highest in the country. Tuition at the seven state universities in Minnesota has increased by more than 100 percent in the past decade, Miles said.

Walz and more than 100 other members have signed on as co-sponsors of a bill by Rep. Joe Courtney, D-Conn., to freeze the loan interest rate for two years.

On Friday President Obama surrounded himself with college students at the White House calling on Congress to pass a freeze. Obama has threatened to veto a House-passed bill that would let the cost of student loans go up and down with the market.

The same showdown over interest rates happened a year ago with Congress eventually agreeing to keep rates where they were for one more year.

Under the GOP plan, a student who borrows money next year could see his interest rate rise every year after that, like an adjusta

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