by Bo Ra Kim, Sierra Student Coalition, Bates Energy Action Movement
July 1st, 2013 marks a grim day for youth across the nation.
From acting on climate, to ending Big Oil's tax breaks, and to helping students, Congress can't seem to act when anything other than big corporate profits are on the line. Now, students have been anxiously watching legislators gamble with their future as they discuss the student loan crisis. We have cheered on bills reducing our loan interest rates, and we have fought against bills seeking to not only keep the new increased rate, but also increase the rate even further.
The cost of higher education is steep and most youth need some sort of financial assistance to afford this investment in their future. However, due to a lack of action in Congress, the interest rates on federally subsidized student loans doubled on July 1 from 3.4% to 6.8%. This change affects 7 million students in the United States and will increase the cost of student loans by $7 billion. That is a $990 increase in debt per student, per loan. This decision doesn’t just make education more expensive, but makes it almost impossible for students to afford their education.
The purpose of a student loan is to make college more affordable so that students can prepare for the future and gain the education they need to compete in the job market. However, it seems that student loans are serving a different purpose now. The student loan programs are expected to generate a total of $50 billion in revenue for the federal government this year.
The average college graduate with loans currently has $26,600 in student debt. Increasing the rate discourages students from getting the college education they need, and will hurt the economy in the future, as youth will have limited or no career options.
Congressional Plans to keep the student interest rates low were blocked by legislators who wanted charge students more for their loans as a way to lower the deficit.
However, as most student loans are issued in August and September, Congress can still pass a retroactive fix! We need to tell legislators that they cannot bury students in debt, and that they need to invest in the future by investing in the education of youth today!