House Democrats’ Data on Student Loan Interest Rates Misrepresent the Problem

Democrats on the House Education and the Workforce Committee this week released a document detailing the increased costs to borrowers if interest rates on Subsidized Stafford loans increase from 3.4 to 6.8 percent, as they are scheduled to for loans issued as on or after July 1^st, 2012. The post provides some big numbers, stating that “more than 7 million students will incur an additional $6.3 billion in repayment costs for the 2012-2013 academic school year if student loan interest rates double on July 1.” But the committee staff’s claim buries the real story: Whatever the vitriol surrounding the interest rate number in Congress, individual students are not likely to notice much difference in their monthly payments.

There wasn’t much detail accompanying the committee document, so Ed Money Watch has tried to recreate the Democrats’ calculations.

Click here to read the full post on Ed Money Watch…