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If Congress fails to reach a decision before July 1st on what’s known as the Interest Rate Reduction Act, then interest for the Stafford loan will increase from 3.4% to 6.8% overnight. Such an increase would coincide with a growth in student loan debt. According to a report from USA Today, student loan debt exceeds 1 trillion dollars and is higher than all credit card debt in the nation.
Leah Woods is a sociology student at Missouri State University.
“I don’t think that that’s very surprising, considering how quickly tuition rates have risen. Students are having to take out more debt to pay for classes. I think that’s a shame because that’s going be a debt that follows them around for the rest of their life, and it can be very hard to pay that back, especially in a poor economy.”
Estimates from the Obama administration show that the increase in interest would cost a student, on average, $1,000 over the life of the loan.
Jeff Wood is a creative writing student at MSU. He says that some students would decide not to take out loans, or possibly not even attend college at all, if the interest rate doubles.
“There’s no way, you know what I mean. I know that a lot of that stuff you pay when you get done with school, but that’s just a 1000 extra dollars that a lot of people don’t have. When you’re taking out a loan in the first place, it is because you don’t have money, so why should you have to pay more money in the end?”
Clint Lawrence is a digital film major here. He has concerns about entering into graduate school at a time when student debt is so rampant, and assistance from the federal government is uncertain.
“The idea of ‘not only am I paying more to get the education, but I’m paying more to pay it back’, is really unappealing to everybody.”
The Interest Rate Reduction Act has already passed the U.S. House—that’s the bill that would prevent the interest rate from doubling. Republican Representative Billy Long of southwest Missouri voted for it. The act now is bogged down over disagreements over where to find the 6 billion dollars the bill is expected to cost.
Again, sociology major Leah Woods.
“I think that investing in education will pay us greater dividends that almost any investment will, so even though it may cost a substantial amount of money to subsidize student loans, education is so important that it should be a priority regardless.”
Students in the Ozarks are vocal about their opposition to stacking more debt onto an already burdened student population. Now, they must wait to see if Congress will actually hear their voices.
For KSMU News, I’m Shane Franklin.