Bill filed to cap student loan interest rate

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TALLAHASSEE, Fla. (Capitol News Desk) - The average college graduate in Florida leaves college owing nearly $24,000. With interest rates at 4.75 percent, student’s fear the amount of time the loans will take to pay back.

“Depending on what major I go after would be my concern. Like for me personally I wanted to do music,” Raven Henry of Gainesville said.

Interest rates on federal student loans are fixed, so once accepted they’re locked into that rate even if the rate drops in the future. Between 2006 and 2013 the rate was as high as 6.8 percent.

“They're putting off decisions about getting married, having a family, buying a home. Some of them don't qualify for a mortgage because they've got so much student debt,” Senator Bill Nelson, (D) Florida, said.

Senator Nelson has filed a bill in the U.S. Senate that would cap the federal student loan interest rate for undergraduate students at four percent. Under current law, rates could rise up to ten percent for undergraduates.

Senator Nelson’s proposal would also allow those with current interest higher than four percent to refinance their debt at a lower rate.

The United Faculty of Florida says the legislation is a good first step. UFF hopes to see similar efforts by the State Legislature to help make college more affordable for students.

“What's happening is the higher cost of higher education is really restricting people of low income more than any other segment,” Marshall Ogletree, United Faculty of Florida, said.

Under the federal legislation, graduate student loan interest would be capped at five percent.