Student loans are in the news this month after the failure of lawmakers to agree on a plan to keep rates at 3.4 percent, causing payments to rise for an already strapped group of student borrowers.
The student loans came to issue on July 1, when rates doubled due to the inability of lawmakers to agree on a plan that included keeping the rates static for the next year — but NPR points out that while students are inevitably affected due to summer class borrowing, if an agreement is reached before fall students head off to college.
As elected representatives refuse to settle the debate, student advocates are frustrated that the rate hike drops the burden of government borrowing onto a group of people with limited earning capacity.
Rory O’Sullivan, student advocate, tells NPR:
“We don’t believe that the federal government should be charging students higher interest rates to pay down the federal deficit … In that case, you’re essentially trading government debt for student debt.”
Others say that they are simply grateful to have bypassed higher interest for student loans for most of their study — Howard University senior Antonya Bruno tells the Los Angeles Times:
“[Federal student loans have] been very helpful … It’s tough to know interest rates will go up, but I’m glad it’s at least not for all four of my years … I feel bad for people who are now entering college, who will have to pay more than I ever will.”
Deon Jones is a senior at American University, and he tells the paper that the student loans debate is not best served by a short-term fix — he says:
“Students taking out loans this fall are thinking, ‘Thank you, Lord, I don’t have to pay more now.’ But we still have to deal with this problem. It’s only going to get worse … I am from a low-income background, and know a lot of friends who are taking out loans and worried about how they’re going to pay for those loans.”
Senator Jack Reed (D-RI) said that if lawmakers are on task, the rates may be retroactively restored — but they have to act quickly:
There is still time to turn it back before the academic year begins … We’ve spoken to the Department of Education and we believe if we move quickly enough in the next few days they can adjust their lending program.
After the July 1 deadline passed, student loans were affected by a rate hike to 6.8 percent.