Student loan debt has nearly doubled in the last five years, posing a potential risk to the economy, according to a new report from Congress.
The information, released Tuesday by the Joint Economic Committee, found that student loans increased from $550 billion in late 2007 to just under $1 trillion in the first quarter of 2013.
Two-thirds of recent graduates have student loans, with an average balance of more than $27,000.
New borrowers could face additional costs in their higher education pursuits unless Congress acts to keep interest rates for federally subsidized Stafford loans from doubling from 3.4% to 6.8% for new loans starting July 1, the report said.
For students borrowing the maximum amount of these loans, this would increase the cost of their college education by $4,500.
"Allowing the interest rate on subsidized Stafford loans to double at a time when the government’s cost of borrowing is so low undermines the public policy objective of providing affordable loans to students," according to the report, released by Sen. Amy Klobuchar (D-Minn.), vice chair of the congressional committee.
The rise in the amount of student loans could harm the economy because individuals who shoulder heavier debts could delay purchasing a home, car and saving for retirement, the report said.
On average, recent graduates left college with a student loan debt of 60% of their annual income.
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