Of the approximately 19,000 students attending Reynolds, about 3,900 currently have at least one Stafford loan. The interest rate increase would not affect existing loans, but would take effect for new subsidized Stafford loans originated for the 2013-2014 school year.
Kiesha Pope, Reynolds’ director of financial aid, noted that for a $3,500 Stafford loan the higher interest rate would equate to increased interest costs of about $540.00 over the life of the loan. Senator Kaine added, “"Most of these folks will take out loans for multiple years so now you're talking about adding thousands of dollars of interest payments."
Kaine, who is a cosponsor of the Student Loan Affordability Act of 2013 that would keep student loan interest rates at their current 3.4% rate for the next two years, told the group, “We’re trying to come up with a solution that would enable students to continue to get the education they need to be successful and economically productive without a choking amount of debt.”
Kaine noted that there are four other proposals under consideration including floating the interest rates with the state of the economy, and placing ceilings on rates and that most likely the final bill will include elements of all the proposals.
The students in attendance expressed concern about the interest rate hike. They told Kaine they want to get an education, find a good job, buy homes and cars and contribute to the economy, but they feel like the difficulties of paying for that education will delay their ability to do those things.Senator Kaine thanked the participants for their participation and their willingness to discuss the issues they are wrestling with. He told the group he is hopeful that a resolution on the interest rate will be reached this week before the July 1st deadline.