At the end of June, college students around the country held their collective breath waiting for Congress to decide how much more it would cost to borrow money to go to school next year.
At the end of June, college students around the country held their collective breath waiting for Congress to decide how much more it would cost to borrow money to go to school next year.
In a vote on June 29, Congress extended the current subsidized Stafford loan interest rate of 3.4 percent for an additional year.
Initial sighs of relief at the decision have since been drowned out by emerging concerns over the ever-increasing cost of higher education.
Still, students at Portland State are relieved by the one-year break.
“I am grateful that student loan interest rates have not increased yet. I shudder to think of all the debt I will accrue once all is said and done. Paying interest on all of it is daunting as it is,” said sophomore Typhanie Hake, who is studying speech and hearing sciences.
U.S. Rep. Suzanne Bonamici (D-Ore.) voted for the one-year fix but would like to see a longer-term solution, said Leah Nelson, a spokeswoman for Bonamici.
“We cannot keep relying on one-year solutions; we’re going to have to find a long-term solution,” Nelson said. “One of the original bills the congresswoman co-sponsored was an indefinite extension.” The bill was never brought to the House floor by congressional leaders.
The rate was lowered to 3.4 percent in 2007 under the College Cost Reduction and Access Act and was set to double this month had Congress failed to extend the current rate.
The bill that passed will pay for the extension by raising employer premiums as well as by capping the government’s payment of student loan interest to 150 percent of the average time that it takes to complete a post-secondary program—a provision that only applies to students taking out a loan for the first time on or after July 1, 2013.
Some students expressed worries over the loss of a six-month grace period to repay interest on loans after graduation. Rosa Martinez, ASPSU legislative affairs director, was among them.
“While we are happy Congress voted to prevent Stafford loan interest rates from doubling, we have serious concerns with the loss of the grace period,” Martinez said. “There are 7.4 million low- and middle-income students with subsidized Stafford loans that are affected by this decision.”
Although some students expressed relief at the temporary extension, others found that their concerns were not completely alleviated.
“The student loan interest rate is extended for maybe one generation. The next generation will have a little bit of a higher student loan interest rate to balance that,” said Andréa Valderrama, event and development director for the Oregon Student Association.
Although student loan interest rates will remain stable for a year, the overall cost of college continues to rise under a public university system that remains parched for funding. Oregon ranks 45th in the nation for per-student university funding, according to a brief by the Oregon University System.
Tuition at PSU was set to increase at an average rate of 8 percent over a two-year period, according to the OUS 2011–13 operating budget. According to Valderrama, some university students have seen a 30-percent increase of their tuition within four years. Lobbying for affordable tuition will be a centerpiece of both ASPSU’s and OSA’s respective legislative agendas for the upcoming year.
“I think that the cost of college is exorbitant,” Martinez said. “Higher education tuition keeps rising every year while the amount of wages stay the same. We are reaching a point in which we simply cannot afford college.”
“Rising tuition is a pretty significant issue when we’re talking about people who are already coming from families from a lower socioeconomic background, who are already underrepresented in higher education,” Valderrama said.
The ballooning costs of college go beyond just tuition, Valderrama said. Increasingly expensive housing, transportation and textbooks continue to burden students, many of whom juggle classes, family and work commitments.
“I was biting my fingernails when news of another tuition hike was circulating…Once my bills are paid for school, the extra money goes toward supporting my family of four,” Hake said.
Valderrama encouraged students to reach out to their representatives and voice their concerns about the increasing cost of higher education.
“Legislators know that students are everywhere and are their constituents,” Valderrama said. “Students within college have so much power, so much fuel behind them; that sometimes gets forgotten. Students really can get their stories over to the capital, and that’s really what’s going to help lower costs for higher education.”
