Student loan interest rate increases worries campus

Students are encouraged now more than ever to get involved in politics as a popular loan program is in jeopardy.

Congress has until July 1 to extend the interest rate of the Stafford Loan program, a fixed-rate student loan for undergraduate and graduate students attending college at least part-time.

Without the extension of the interest rate, students could see an additional $1,000 of debt added to their loans, which could jeopardize student’s pursuit of higher education and affect enrollment of colleges, said SIU President Glenn Poshard in an email.

In 2007, Congress voted to cut the Stafford Loan interest in half by 2011 from 6.8 percent to 3.4 percent. This represented an estimated savings of $7.2 billion for students in higher education from 2007 to 2012.

Stafford loans are the most common and one of the lowest-cost ways to pay for school.

In 2011, unsubsidized and subsidized Stafford Loans accounted for around $85.8 billion of $111.9 billion of student loans according to the College Board website.

Poshard said this change in interest rates could affect a lot of students at SIU and cause some to be unable to attend the university. He said no one thought the low interest rate would be slated for elimination.

Poshard said while it is important for faculty and staff to be involved, the greatest impact will come from students themselves. He said students just need to send a short email to their representatives and tell them their stories. Poshard said this is an exercise in citizenship from the students and will show a level of maturity.

From the 2010 to the 2011 academic year, 12,042 SIU students received a Federal Direct Loan totaling more than $1.32 million, said Terri Harfst, the director of SIU’s financial aid office.

Harfst said the financial aid office would continue to award Stafford Loans regardless of interest rates. She said most students would not feel the effect of the higher interest rate until they begin to repay their loans, which mostly occurs after graduation.

She said the financial aid advisors always encourage students to only apply for a loan amount that is absolutely needed and will encourage it further if interest rates increase.

Talks of a loan interest increases have caught the attention of students on campus.

Chris Broms, a sophomore from Arlington Heights studying chemistry, said he is worried about the increase in interest rates as he is currently taking out student loans. Broms said he is angry the government is always talking about having affordable education, yet the idea of the increase in interest goes against that.

He said he plans to send an email to Illinois Senator Mark Kirk to voice his opinion as he helped support Kirk during his election.

Brons said the increase in interest would not affect his ability to attend SIU.


Print Friendly
  • Comments:
  • close
    Facebook Iconfacebook like buttonYouTube IconSubscribe on YouTubeTwitter Icontwitter follow buttonOur InstagramOur Instagram
      Secured by Incapsula