Congressional delegation backs student loan rate freeze
AMHERST — Meghan Jordan of Amherst graduated from Souhegan High School in 2010 without any debt, but in about two years she could be facing more than $45,000 in student loans.
Jordan, a sophomore at the University of New Hampshire, says that although the student loan payments are high, her main concern right now is the possibility of interest rates rising on her federally subsidized student loan.
“If interest rates double, it would be devastating,” said Jordan, adding her student loan debt has become a constant concern for her and many other New Hampshire college students.
Interest rates on subsidized Stafford Loans are set to increase from 3.4 percent to 6.8 percent on July 1, which could add an average of $1,000 to the debt of more than 7.4 million students when they graduate college, according to a release issued by Sen. Jeanne Shaheen.
There are nearly 38,000 students in New Hampshire with subsidized Stafford Loans who could be affected, and they would pay an additional $30.5 million combined if action isn't taken, says the release.
“Keeping college affordable is crucial to ensuring our workforce has the skills to compete in a global economy. We need to come together in a bipartisan way to keep these rates low,” Shaheen said in a statement, adding New Hampshire has the highest average student college debt in the nation at more than $31,000 per student.
Jordan says her parents would do just about anything to pay for her college education in full, but with two brothers also attending college, the finances are simply not available.
If interest rates double, it would be a personal attack on not only Jordan, but other college students trying to make a better future for themselves, she said, adding it seems like a punishment for trying to obtain a college degree.
“It is going to be a very long road,” said Jordan, who is thankful that her grandmother is helping to pay for a portion of her tuition. Still, there are others who are not as fortunate, and will be faced with big student loans, high interest rates and if the economy doesn't improve, the possibility of a bleak job market, said Jordan, an ecology evolution major who would like to attend graduate school but fears she may not have the necessary funds.
“This is not just a theoretical issue,” said Katrina Swett, a professor at Tufts University and a trustee of New England College. “This impacts personal lives.”
If Congress fails to act, federal student loan interest rates will double this summer, said Swett, arguing middle class students working hard in college to graduate with necessary work skills should not have to sign away their future financial security.
If interest rates double, it will make it tougher for middle class families to attend college, she said, adding President Barack Obama is focused on keeping interest rates on student loans low so that more Americans will get a fair shot at an affordable college education.
“The President's commitment to making college more affordable stands in stark contrast to Mitt Romney's advice to students that they ‘shop around' if they are worried about tuition,” says a release issued Wednesday by the New Hampshire Obama campaign. “Romney also endorsed Congressman Paul Ryan's Republican budget plan, which would let student loan interest rates double and force students to incur more and more debt.”
In a statement issued by Romney last week, Romney encouraged Congress to temporarily extend the current low rate on subsidized undergraduate Stafford Loans, even though some Republicans have opposed the extension because it would come at a high cost to taxpayers.
The parties may both want the rate frozen, but disagree on the method of how to pay for it.
“I also hope the President and Congress can pass the extension responsibly, that offsets its cost in a way that doesn't harm the job prospects of young Americans. Ultimately, what young Americans want and need is a new president who will champion lasting and permanent policy changes that both address the rising cost of a college education and get our economy really growing again,” Romney said in an earlier statement.
Under Republican-authored legislation passed by the House of Representatives last week, rates on the loans would not be doubled as scheduled on July 1, but the plan would result in funding cuts for disease prevention and public health.
Congressman Charles Bass hailed passage of the legislation extending the current student loan interest rate for one year, last week urging the Senate to consider the legislation as soon as possible.
Rep. Frank Guinta agreed. “As the Class of 2012 prepares to leave college soon, many 2011 grads are still trying to find a job. Students, graduates and their families are struggling with hefty college costs in a sluggish economy,” Guinta said in a statement after the vote. “ … This bill will help them continue repaying their loans, and does so without adding a new burden to taxpayers.”
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