Editorial…What price learning?It’s questionable how many college graduates would have made it through school without any financial assistance. Chances are that few, if any, would be
By: Wendy Johnson, Pine Journal
It’s questionable how many college graduates would have made it through school without any financial assistance. Chances are that few, if any, would be able to afford the cost of higher education strictly out-of-pocket. Even a generation ago, college tuition costs were far too great for the average student to go it on his or her own.
For many, many students, the universal key to educational success has been the federally subsidized Stafford Student Loan Program. In fact, more than 7 million Americans, including 200,000 Minnesotans, depend on Stafford loans to get through school each year.
The Stafford Loan Program provides eligible college-bound students the opportunity to secure either subsidized or non-subsidized loans, depending on income, to help cover the rising costs of tuition at accredited colleges and universities. Essentially, students receiving the loans are able to defer payment during the time they are in school, as well as during a six-month grace period following graduation or leaving school. The interest rates on the loans have historically been kept low to help ease the burden of repaying the loans while a graduate is still striving to make it in the world of work.
All that is about to change. The current interest rate for subsidized Stafford loans is 3.4 percent, but without Congressional action by July 1, that interest rate will double.
According to U.S. Senator Amy Klobuchar, Minnesota students depend on Stafford loans more than most – a Minnesota student now graduates with an average debt load of $29,000, which puts Minnesota fourth in the nation for student debt. The pending hike in interest rates to 6.8 percent for subsidized Stafford loans means double indemnity for those students – at the same time the cost of post-secondary education is higher than ever before (and rising), the job market remains at near-record lows.
It follows that as the interest rates on student loans go up and the amount of their debt goes up accordingly, something has to give. For many, student loan debt chews up a significant part of their income, forcing them to delay such basic things as buying a house, starting a family, or saving money for retirement – or for their own children’s college education. Some individuals or couples continue to have to pay off student debt far into middle age.
The fact of the matter is that if rising interest costs and stricter guidelines for student loans make them prohibitive for some, those folks may simply have to make the decision to avoid higher education altogether, and America’s workforce will suffer because of it.
Klobuchar and fellow U.S. Senator Al Franken, also of Minnesota, are co-sponsoring legislation known as the Student Loan Affordability Act that would delay doubling the interest rates on subsidized Stafford loans by at least one year, paving the way for the thousands of Minnesota students headed to college next fall to continue to get that much-needed benefit to help them get by.
They can’t go it alone, however. The measure took a step backward on Tuesday when it failed to receive adequate support to move it on for debate. Both are pledging to redouble their efforts to revive the legislation and punch it through prior to the July 1 deadline.
If you feel strongly that the interest rates on Stafford loans should be kept low, or if you have a personal story of success or heartache related to college loan debt, put in your two cents’ worth while there’s still time.
Contact Klobuchar via her website at www.klobuchar.senate.gov; by mail at 302 Hart Senate Office Building, Washington, D.C. 30510; or by phone at 888-224-9043.
Contact Franken via his website at www.franken.senate.gov; by mail at 309 Hart Senate Office Building, Washington, D.C. 20510; or by telephone at 202-224-5641.
Minnesota Eighth District Congressman Chip Cravaack can be reached through his website at cravaack.house.gov; by mail at 508 Cannon House Office Building, Washington, D.C. 20515; or by telephone at 202-225-6211.