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This summer, the I AM NOT A LOAN campaign fought numerous proposals claiming to be long-term “solutions” for college affordability. Most really were just long-term disasters that would only make things worse for students. In the end, students got stuck with the Student Loan Certainty Act, a “compromise” by which the government stands to make billions off the backs of students. The deal lowered interest rates for subsidized Stafford loan borrowers now, but will also allow them to rise way too high in the long run—making it even harder for students to repay their loans. Even worse, the interest rate cap is higher for graduate students; and they are speaking out.

The interest rate cap for undergrad students is entirely too high at 8.25 percent. However, rates for graduate students could increase to a whopping 9.5 percent!  An article in the Huffington Post tells what the National Association of Graduate-Professional Students (NAGPS) and The Council of Graduate Students (CGS) are doing about it:

“Students want their grievances to be part of the discussions as lawmakers debate the reauthorization of the Higher Education Act, which lays out guidelines for distributing federal student aid.
The NAGPS will lead a delegation of its members to Capitol Hill on Sept. 16-17 to directly address legislators. The Council of Graduate Students (CGS) has also submitted recommendations to Congress and plans to coordinate hearings with other student groups and lawmakers in coming weeks.”
The graduate students are demanding that interest rates be capped at 6.8 percent. However, it remains unlikely that it will happen.
“A senior Republican aide on the Senate Committee on Health Education, Labor and Pensions told Reuters that the caps had to be higher on graduate students so the government did not have to subsidize those rates.
‘This was a result of a compromise, a negotiation,’ the aide said. ‘There are winners and losers.’”
The student loan program will generate $185 billion for the federal government over the next decade. At a time when Congress should be doing everything in its power to make college more affordable, it looks like we—the students—are the only ones losing.  
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Comment Preferences

  •  Bass Ackward policies (6+ / 0-)

    The US Congress refuses to properly invest in its youth.  Instead, the youth have become an income commodity for Wall Street to churn.

    When will the US youth simply boycott higher education, starve the cash cow, in order to force Congress to implement programs that INVEST, not profit, from educating Americas most important asset, its future, its YOUTH!?  

    We need Policies that will end the proliferation of pretend colleges and universities located in strip malls and office parks?  

    We need Policies that punish universities that have high failure rates?

    We need policies that use the profits made from research by the STUDENTS into tuition for more students, not handed over to a private corporation/equity firm that gets to keep all the gains from university research.

    WHEN?

    This one issue makes my blood boil.  I don't understand why we are frozen in our outrage?  Do we all have Stockholm Syndrome or something?

    Hey, living wage jobs, full-time, fulfilling jobs aren't out there anyway.  And what do those that manage to get one have to look forward to?  Being tossed into the trash bin once they turn 50.

    What are we waiting for.

    BOYCOTT HIGHER EDUCATION NOW, stop the profit commodification of our youth.  Starve the beasts.

    It's difficult to be happy knowing so many suffer. We must unite.

    by War on Error on Wed Sep 11, 2013 at 08:07:37 AM PDT

    •  WoE - there was a diary a few months ago (0+ / 0-)

      where a group of people worked through the all-in cost to the federal government to provide student loans. Based on published data from numerous government sources we came up with a break even number of 6-7%.

      We didn't see any Wall St profits in the loan business, which has become nearly 90% provided by government.

      Personally I support more investment in college students which can take many forms, including an additional interest rate subsidy.

      "let's talk about that"

      by VClib on Wed Sep 11, 2013 at 10:30:07 AM PDT

      [ Parent ]

    •  Two words: (1+ / 0-)
      Recommended by:
      War on Error

      Brain Drain

      It's already starting, and will only accelerate. Soon enough, the republicans will have their dream economy of ignorant poor people, unable to fight back against the wealth hoarders.

  •  I have no objection to the SLCA. (2+ / 0-)
    Recommended by:
    Rich in PA, nextstep

    If the 10-year treasury rate actually goes high enough to take student loans to 8-9%, then that'll be an appropriate interest rate given the rest of the economy.

    shakes cane

    Young people... I use to remember savings accounts with 4.5% interest rates. Now you can get a home loan that charges lower interest than that...

  •  The federal government distributes dollars. (3+ / 0-)

    It does not need to charge interest at all.
    The federal government was subsidizing the loans when banks were doing the lending and the federal government guaranteed any defaulted loans + whatever fees and charges had accrued. So, there was no incentive for banks to judge were the loans were to pay for education at valid institutions to begin with and no incentive to see that the loans got repaid by the students. Indeed, the longer they delayed, the longer the fees piled up and the more the banks were able to either carry on their books or collect from the feds.
    Now that the banks have been cut out as middlemen, it is disingenuous for Congress to argue that the interest rate charged by the federal government needs to be "competitive" with what banks would charge, if they could get away with it.
    The extent to which the interest on education loans is supposed to fund Medicaid expansion is an interesting question. It would seem worth while discussing the philosophical rationale for letting higher education students not only pay for their own education, but subsidize the medical needs of working people to whom corporations don't pay enough to meet their needs as well.
    "Stick it to the smart kids," seems like a very juvenile idea for members of Congress to have.

  •  Whoever is authoring or sponsoring this bill... (1+ / 0-)
    Recommended by:
    radical simplicity

    Defeat them for re-election.   I don't care what the odds are.

  •  I graduated from college in 1970 (0+ / 0-)

    with a total student loan amount of $500 and my first real job paid $1000 a month. I think I had 5 years to pay it off, but I did it early. The loan was payable no matter what the interest rate was. Forward to 2005 when I consolidated my parent loans (for 2 children ... and that is not counting their own loans) to a single one of $40000 at much less than 8.25 quoted here and which I will pay for the next 20  or so years.

    It is the interest rates, the amount of money necessary to get educated and the lack of good paying jobs that is creating indentured servants instead of creative and productive graduates who will create better products and services and art.

    I really don't know what the future holds.

    "I want to live in a world where George Zimmerman offered Trayvon Martin a ride home to get him out of the rain that night." Greg Martin, Bishop of the Episcopal Diocese of Central Florida

    by CorinaR on Wed Sep 11, 2013 at 11:34:32 AM PDT

  •  $185 billion is coming from students, not the 1% (0+ / 0-)

    Thanks, GOP!

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