I am a college student who is really tired of hearing Congress argue about college. Whether it is college tuition costs, college debt or unemployment after college, the word "college" is constantly in the headlines. The most recent controversy surrounding college is the disagreement among Congress on the interest rates on Stafford loans.
This week, Senate Republicans rejected a bill preventing interest rates on federal student loans from doubling July 1. If Congress does not compromise and find a way to keep interest rates at the current level, then the rates on Stafford loans will double from 3.4 percent to 6.8 percent this summer. Republicans rejected the bill because it would increase taxes on Social Security and Medicare for high-earning stockholders in private corporations. As a counter solution, Republicans have proposed a bill that would keep the interest rates at the current level by cutting a preventive health program created in 2010 by Obama's health care overhaul.
Before we let interest rates on student loans double, let's take a look at the facts on student loan debt. American students took out about $112 billion in student loans in 2011 and currently owe, overall, $1 trillion in student loans. In 2010, student loan debt surpassed national credit card debt for the first time in history. Now, take these statistics and pair them with an 8.1 percent unemployment rate and an average 7.3 percent tuition increase for four-year public universities in 2011. It is obvious we have a student population whose financial state is only going to worsen.
So here is what I don't understand. Say Congress fails to agree on a solution and the interest rates double this July. Does Congress really expect college students to be able to pay back the debt? All we hear about is how recent college grads can't find jobs and can't pay their loans. (Wasn't this one of the main reasons behind the Occupy Wall Street movement?) It just doesn't make sense to me that, in order to lower the national debt, Congress would raise interest rates on loans that students are already having trouble paying back. Simple logic would tell you there is a large chance this will not be successful. Not to mention the loans we are discussing are often need-based. Stafford loans are specifically for low to middle-income families meaning if interest rates do double, the burden of that debt will, in many circumstances, fall to the family of the student.
I am not trying to make an ideological argument, nor am I advocating taxing the rich instead of the poor. I understand the reason Republicans have for opposing the bill. If we raise taxes on Social Security and Medicare for U.S. business owners, we will prohibit job growth at a time when the American people desperately need jobs. This is a valid concern and a cause for apprehension when agreeing to any proposed bill. But, in the end we are going to have to take the money from people who will be able to pay it. It may not be fair, moral, ethical etc., but it is logical. Students, like myself, will not be able to pay these interest rates back. When it comes down to it, money is money, and you either have it or you don't. As for college students, we don't, so Congress might have to take it from someone else this time.