Over the last five years at Wesleyan we have reduced the use of loans in our financial aid packages because we realize that debt can play havoc with one’s choices after graduation. We are committed to keeping loans as low as possible, and we no longer ask our neediest students to borrow anything at all.
As many of you know, Congress began its 4th of July recess without taking action in regard to the interest rates paid on student loans. The result is that student loan rates will double — from 3.4% to 6.8%. While it’s hard to be surprised anymore by a deadlocked Congress, in this case the inaction is particularly galling. Young men and women who need to borrow to meet their college expenses face dramatic increases in their payments, and some will choose not to pursue their education as a result. This increase in rates is especially unfortunate because the premium in wages for those who get a college degree (as compared to those with only a high school diploma) has never been greater. Moreover, there are reasonable alternatives before the Congress right now, and any one of them is preferable to inaction. Some propose market-based frameworks for the long term, others propose caps on interest rates for those most in need of assistance. Here is a chart from the National Association of Student Financial Aid Administrators:
Is it too much to expect Congress to reach a compromise to help student and their families? Reasonable solutions are out there. Demand that Congress act now!
Students shouldn’t be denied the choice of attending a school like ours because of high interest rates. Thanks for your 4th of July message, Michael.
Michael, I agree with you 100 %. Nothing is more important to the future well-being of this country than the education of the next generation. Ensuring the availability of low-interest loans for college should be the highest priority for our government. The Preamble to the US Constitution specifically states, as a founding principle of the country: “[to] promote the general Welfare.” That would include the education of our youth. The on-going Congressional gridlock is the doing of a far-right Republican Party. They have abandoned the fundamental principals of the very Founding Fathers to whom they so often and so hypocritically refer.