Friday, May 31, 2013

Get ready for college loan rates to rise

Posted By on Fri, May 31, 2013 at 5:10 PM

It’s hard to imagine enrolling in college considering the staggering cost of tuition. What are young people supposed to do if they come from lower income and middle class families? The competition for grants and scholarships is fierce, and on July 1, student loan rates will jump unless Congress intervenes.

Student loan rates for more than 7.4 million students will literally double from 3.4 percent to 6.8 percent in a month. US students are carrying about $1.1 trillion in college loan debt, and roughly 35 percent of the students under 30 are on the verge of default.

It would seem like investing in educating our young people would be one of the most nonpartisan issues before Congress. But that’s hardly the case.

An article posted on Commondreams.org by Dave Johnson does a good job of laying out the differences in a slew of bills that attempt to address the problem. Republicans are proposing market-rate loans, which would cap at 10.5 percent for graduate students.

Among Democrats, Senator Elizabeth Warren is pushing for a .75 percent or nearly a no-interest loan rate.
Student loan debt now exceeds credit card debt, and the only debt higher for most American families is mortgage debt.

It’s hard to imagine a robust economy anywhere in the near future when so many students and their families are indentured to the government.

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