Student-loan interest rates doubled, effective July 1, going from 3.4 to 6.8 percent after Congress failed to extend the lower rate. And fail is exactly what it did.
In a city like Seattle, where 33 percent have bachelor’s degrees, going to college is no longer an option if people want to be successful.
Of the 20 million Americans who go to college every year, 60 percent borrow money to cover the costs of education, according to the organization for American Student Assistance. The Federal Reserve Board of New York reports that 40 percent of student-loan borrowers are under 30. Student debt across the country is no small matter: The Consumer Financial Protection Bureau reported in 2012 that the debt had reached $1 trillion.
Washington state is classed as a low-debt state by the Project on Student Debt. College graduates from the Class of 2011 in Washington leave school with an average of $22,244 in debt. This, however, is not far from New Hampshire, the highest-debt state, where students leave school with $32,440 in loans. And even though our debt may be lower, nearly 60 percent of our state’s students are graduating in debt, the Project reports.
A good education comes at a price. A Washington resident attending the University of Washington can expect to pay $27,587 each year. Students at Seattle Pacific pay $43,680 a year, and Seattle University totals $52,605 a year.
With rising tuition rates, students need assistance, and those who choose to use government loans to get through school should not be punished. We are setting students up for a future of constantly climbing out from a mountain of debt.
It could be worse. The interest increase will only affect subsidized Stafford loans and only new loans issued after July 1. Loans issued before July 1 will keep their original interest rates.
There may still be time to fix the situation. According to a July 1 article from The New York Times, the Senate will vote on a bill on Wednesday, July 10, that would keep the rates at 3.4 percent for another year.
We’re at a time where a college education is nearly mandatory to be successful, but students are not given the opportunity to start their future without crippling debt.
The Senate needs to address the situation and realize that our future will continue to dim as long as we hold the future down with debt.
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