Education News

Clock ticking on student loan interest rates

by Mary Ellen Flannery

Students should not have to “mortgage their future” to pay for college, said U.S. Senator Sherrod Brown (D-OH) on Wednesday, as he called on his colleagues to quickly pass his legislation, the Stop the Student Loan Interest Hike Act, and avoid an impending doubling of the interest rates on federal student loans.

Nearly 7.5 million Americans use these low-interest loans to pay for their college education—their ticket to much-needed jobs, home ownership, and the American Dream. Without a rate freeze, they’ll rack up an additional $1,000 in debt each year. The Senate is expected to consider Brown’s bill early next week.

“Funny thing about educators, we’re good at math. Some, like me, even taught it,” wrote NEA President Dennis Van Roekel in a recent National Journal editorial. “How do you manage $15,000 in student loans on a $30,000 beginning teacher’s salary? That’s an arithmetic problem that plenty of new teachers and current education majors are agonizing over.”

Just ask Shalesha Parson. The Kansas kindergarten teacher, who is also the single mother of a 6-year-old, earns $39,000 a year — and owes more than $53,000 in student loans. “I have a hard time balancing my bills and raising my daughter,” she told NEA. It’s like “a dark cloud of debt over my head.”

That dark cloud is a gathering thunderstorm in this country. In 2010, the average college graduate owed $25,000 in student loans. For the first time ever, student loan debt in America exceeds credit-card debt. Sometime this month, the total amount of student loan debt in this country is expected to reach $1 trillion.

And don’t forget all the students who look at the enormous costs and simply opt out. They can’t become the great teachers, nurses, computer scientists, and entrepreneurs that this country needs. By 2018, two-thirds of the jobs in this country will require some postsecondary education, a recent Georgetown University study found, and we will likely fall short by 3 million workers.

“Affordable college is not a charitable contribution. It’s an investment and…(it) benefits the country for generations,” wrote NEA Vice President Lily Eskelsen in a recent blog post, explaining how a federal student loan helped her pay for her education degree. “It is the foundation of a thriving middle class.”

Currently, interest rates are set at 3.4 percent, thanks to the 2007 College Cost Reduction and Access Act, which reduced rates on federally subsidized Stafford loans for four years. It expires this July, and rates would jump to 6.8. In a conference call with reporters on Wednesday, Brown looked back to those days, when lawmakers from both parties worked together to freeze the rates — because they agreed it was the right thing to do.

But Brown said he believes most House Republicans don’t care if students are priced out of an education or saddled with a lifetime of debt. There are still “privileged people,” he said, who will be fine.

Unfortunately, Megan Brown, a special education major at Peru State College in Nebraska, and an NEA Student member, may not be among them. Brown, a single mother who dreams of working with adolescents with special needs, is studying full-time so that she can “earn a more stable and brighter future for me and my daughter,” she said, “and also have the skills and knowledge to positively contribute to society and my community.”

But, she added, “If the rates on loans are increased, I am not sure how I will be able to finish my degree.”

Do you have a story to share about college debt? Would you have chosen a different career if you knew your interest rates would be doubled? Are you concerned about the financial realities of sending your own children to college? If you are a current student, what would doubled loan rates mean to you? Tell us your story by filling out the form below and you may be featured in an upcoming Education Votes article.

 

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