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Republican filibuster of student loans comes at bad time

Published: Monday, May 14, 2012

Updated: Monday, May 14, 2012 01:05

 

With Americans owing more than $1 trillion in student loan debt, the Senate’s filibuster last week of a Democratic proposal to freeze student loan
interest rates could not come at a worse time.

While Democrats propose to fund the difference in interest rates — which will automatically double on July 1, if no legislation is passed to delay that date — by no longer allowing small business owners earning more than $25,000 to avoid payroll taxes, Republicans propose to cut funding from the 2010 Affordable Care Act, in turn cutting funding to cervical and breast cancer screenings, diabetes treatments and childhood immunizations. 

Though both parties have assured that they wish to see the extension of the low rates, if Congress cannot set aside their politics by July 1 to figure out how to make up the difference, an estimated 7.4 million students will see their loan interest rates double, according to the New York Times.

A Times analysis of data from the Department of Education found that 94 percent of students pursuing a bachelor’s degree borrow money, while 45 percent did so in 1993. From those who started repaying their loans in 2009, about one out of every 10 borrowers defaulted within two years. 

And the increasing debt has led to a much larger problem.

According to a study by Rutgers University, 40 percent of recent college graduates interviewed  said they delayed making major purchases because of the debt they had to put off. More than 25 percent moved in with relatives or paused their pursuit of education because of money, and about half had a full-time job.

According to the College Board, students in 2011 borrowed about two times as much as they did 10 years ago. 

With the increasing need for loans to continue higher education, students can’t afford an increase in interest rates.

The potential interest rate increase is compounded by recent lawsuits by the federal government against those who do not repay their loans. In 2011, the federal government sued 4,328 people for old debts nationally, which was 43 percent more than it had a year prior. 

When the gov ernment gives out federal loans, it does not take into account the borrower’s ability to repay the loans. 

Avoiding loans altogether is not a realistic solution, especially for students who have no other means of continuing their education without them.

The fact that the loans must be paid off eventually and are not forgiven by bankruptcy creates a seemingly endless spiral toward debt with no tangible solution.

Students take out loans that they will be very unlikely to pay off. As tuition increases and the job market declines, graduates are thrust into a world where they are expected to pay off high debts with jobs they do not have and salaries that cannot sustain.

It is time for the political parties to set aside their differences and work toward a comprehensive solution that will not only alleviate student Stafford loan stress, but will also bode well for future generations.

 

Zein Kattih is a sophomore majoring in cellular and molecular biology. 

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