The rate on subsidized Stafford loans is scheduled to jump from 3.4 percent… (Getty Images file photo )
Raise your hand if you have student loan debt. Oh, that's the majority of you? Color me not shocked.
Like many students, I had to use a combination of scholarships and federal loans to pay for college. Some would say I was fortunate to walk away with only about $15,000 in student loan debt when I graduated. I guess that's pretty true; these days college students are averaging $25,000, according to a recent Associated Press report.
It's a hefty sum a lot of students end up taking on to get an education they otherwise couldn't afford. And unless Congress steps in, it's about to get a lot heftier. This summer, when interest-reducing legislation expires, the rate on subsidized Stafford loans is scheduled to jump from 3.4 percent to 6.8 percent. That's more than what many homeowners get for their mortgages!
Hundreds of thousands of students have petitioned their representatives for a reprieve and, to his credit, President Obama has pressed Congress to stop the rate hike. The increase would save the government billions of dollars, but it also would mean thousands more in loan payments for individual students. But at what cost to the country's future?
If you're looking for a word to describe a situation that would result in some of the country's brightest students (who happen to come from low-income homes) from attending the best universities, I believe it's "outrageous."
Taking on that debt is something I did consciously. I knew my family couldn't afford my first-choice school, and I could easily have gone to a public university in my home state of Texas for next to nothing in comparison. But once I got that acceptance letter from Northwestern, my stubborn attitude kicked in: I would attend this school, cost be damned.
While I know the economy eventually will bounce back and the investment will pay off, there are a lot of recent graduates who are in the same situation as I am: freelancing or working part time, or they're just unemployed and don't have the good fortune of living at home or financial support from their parents.
Between paying for rent, utilities, cellphone plans, groceries and whatever else you need, a monthly loan payment can have you pinching pennies. I would know—I just applied for deferment on my Stafford loans because I'm working only part time. It's a relief that I'll be saving that money for now, but in reality, I still have a giant IOU note hanging over my head.
Now we might make that burden even greater?
The possibility of more loan debt is a factor in why I haven't considered grad school, mostly because the prospect of sticking to Lean Cuisines and bottles of Two-Buck Chuck well into my 30s is just depressing. And the idea that loan debt would make anyone reconsider going to their dream school is pretty unacceptable. If this rate increase actually happens, new students will do exactly that.
A high price tag is what stops us from buying new furniture or those pairs of shoes we clearly don't need, but it shouldn't prevent anyone from getting a degree at the college of their choice. It's already next to impossible for the most recent generation of college grads to be financially responsible. There's no need to continue the vicious cycle of overwhelming debt for incoming college students.
DANIELA GARCIA IS A REDEYE SPECIAL CONTRIBUTOR.