by Ramin Gouhari
Many at SU could see their federal subsidized loan rates double on July 1. Congress will vote on whether or not to extend the current 3.4 percent rate or double it to 6.8 percent.
In recent weeks, President Obama has been visiting campuses across America bringing attention to the issue and stirring up support for Congress to extend the current rates.
The president recently asked students at North Carolina University if they could afford to pay an additional $1,000 on top of their current debt. Though this average may be representative to four years of federal subsidized loans at an Ivy League institution, it is important to note that other students at different schools may not be affected in the same way.
With less than two months until Congress decides on the bill, an estimated seven million students from lower income families who use these federal subsidized loans are waiting to see if a compromise can be reached. The decision to extend the current rates or let them expire has Congress split along party lines.
The majority of House Democrats would like to extend the current rates whereas most Republican representatives believe the raise to be a necessary step towards balancing the federal budget. Politics aside, the gravity of this legislation could very likely affect many students at SU.
“It’s really a case-by-case issue. There are so many variables that go into how much money different students borrow and for how long.” said Barri Zimmerman, director of financial aid at SU. “From 2010 to 2011, 6,300 SU students used financial aid services. Three thousand and five of those students received federal subsidized loans.”
Many of these students are already swamped with other expenses, and a hike in loan rates would only add to their financial burden.
Some students who have used these loans are glad they’re close to graduation.
“I’m at the finish line so luckily it won’t be too much of a problem. If I was just starting out though, I’d be pretty furious. Part of the reason I went to SU was because it was a more affordable University.” said SU senior Shea Patrick.
Other students like SU junior Tiffany McLean will feel some of the impact from a change in rates. “If they don’t extend the current rates, it’s definitely going to add more stress. It would cost me hundreds more dollars and I’m already struggling to pay my bills now.”
National consumer debt statistics used to recognize credit card debt as the highest form of debt faced by Americans. In the last ten years, student loan debt has steadily passed credit card debt. Should Congress vote on doubling the current loan rate, this statistic would only continue to raise ultimately making college less accessible to the average high school graduate.
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