By Shayla Mulzac
Due to Congress’s failure to act, the interest rate on the very popular federally subsidized Stafford student loans doubled on July 1 from 3.4 percent to 6.8 percent, causing millions of students to worry about their future.
“Personally, I feel like the government is telling me that I have to choose either a minimum wage job post high school or agree to crippling debt post-grad,” said Maya Ennis, a senior psychology major at Wheaton College in Wheaton, Ill. “In an economy that has already proven to be hard on recent graduates in terms of finding jobs with a decent salary, it does not seem to make sense to increase the burden. In some ways it feels like students who decided to attend college but who cannot pay the full fee out of pocket are being punished.”
Last year, Congress voted to extend the lower rate on June 29, 2012 for another year. A year after the temporary extension of the interest-rate-relief program, Congress has still not passed comprehensive legislation that permanently addresses the federal student loan rate.
Both Democratic and Republican lawmakers have vowed to lower the rate before students return to school in the fall. Still, the uncertainty is bothersome to students who are also aware of partisan bickering so intense that a distracted Congress has been unable to end the budget cuts of sequestration.
In the absence of a decision to reduce the doubled rate, nearly 7 million students will suffer. In a waiting mode, some students are struggling to figure out whether it is beneficial to sign off on student loans for the upcoming fall semester.
“The increase is just too much and it makes me feel like going to school is not worth it. I’m much better off going to a trade school or developing a skill that can generate enough funds in my pocket and then go back when I am financially stable,” said Oneil Jerrick, a sophomore majoring in business marketing at Brooklyn College in New York. “Getting an education will always be in high demand but what’s the point of raising the rate on a loan where we have millions of students graduating each year unable to get a job?”
Rep. Joe Courtney (D-Conn.), had planned to introduce legislation this week extending the 3.4 percent rates for an additional two years. This would give Congress time to rethink student loan interest rates as part of the higher education reauthorization bill.
Sen. Elizabeth Warren (D-Mass.) has proposed a new Bank on Students Loan Fairness Act that would set the student loan rate to 0.75 percent for one year. That is the interest rate that the Federal Reserve officers to major banks. The student loan rate is now higher than most loans available from private lenders.
With all the back and forth, students are measuring the impact that they themselves could someday make so that students who come behind them won’t face the same conflicts.
Kianna Taylor, a Howard University senior majoring in early childhood education, said, “I hope more students can understand how this effects their lives and they will work towards changing this.”