‘WASHINGTON (CNNMoney) — On July 1, the interest rates on student loans subsidized by Uncle Sam will double to 6.8%.
The upshot? Students taking out loans for the next school year will have to dig deeper in their pockets to pay them off. Unless Congress steps in to stop the increase from going forward.
The issue has become a political talking point. President Obama, who called for congressional action in his State of the Union speech in January, is using the issue to stump for votes.
His Republican rival Mitt Romney says he, too, believes Congress should step in.
On Tuesday, Senate leaders said they will take up a bill within days to extend the lowered interest rates. The Senate minority leader, Mitch McConnell, said Republicans are willing to consider the measure as long as there is a way to pay for the extension….”
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Let them double. Students might actually think twice about getting that idiotic “music librarian” degree.
More important, the bloated college system might think twice about it’s annual triple-inflation tuition increase.
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The college near me has to somehow pay for it’s olympic sized indoor swimming pool, 3 weight rooms, indoor track, 8 basketball courts, football stadium, baseball stadium, outdoor track, soccer fields etc. Those are the reasons why you go to college, right?
Part of me wants to see the government call the school’s bluff and say “if you don’t want your revenue to fall due to lower enrollment, you’re going to have to cut costs cuz we’re doing nothin'”
Of course they’ll take the easy way out and pony up the cash as per usual. Anything else would mean they aren’t “supporting higher education.”
But they won’t, though.
They will a few years out when enrollment drops 20%.
As long as the gubmint continues to hand out student loans like candy, tuition will continue to increase.
I mean really, if Joe Guy can major in “music librarian-ism” and have the government pay for it up-front, what incentive is there for the university to rein in costs and fees? If they raise tuition every year, the government just steps in to pick up the slack by loaning the student more money. Of course this is bad for both the government and the student because the student defaults and screws their credit, and the government doesn’t get their money. If student loans are reasonably capped, then schools will compete for students rather than stick them with insane quantities of debt for degrees that mean jack shit, like the case of Joe Guy the music librarian.
Christ, Obama’s speech today about this was incredible. He talks about the decline in grant funds and the huge increases in college expenses…His answer? Keep student loans cheaper! Christ on a crutch we have a bunch of fucking dumb asses in this country that obviously don’t understand that more and cheaper student loans will continue to drive up the cost of college. But that is what he wants, no? To make it so expensive that the only choice is to make it….free?
Wood, I am in complete agreement with you here.
But what can we reasonably expect to be done about this situation? Making student loans more expensive would be handing a campaign platform on a silver platter to anyone that wants it. Republicans would run with it, much like Dems would run with it if the roles were reversed, however misguided and harmful such viewpoints are. I think we’re still a long way away from having politicians vocally express that it’s the schools fault and low interest rates are harmful. I fear it’s going to take a massive wave of defaults that occur in a low interest rate environment to change the rhetoric.
In the end the government will take the easy way out as they always do, keep rates low and everyone will lose.
I agree Left. That is why I’m so pissed off. All our gov’t does is lie. They rely on the fact that most people do not understand basic economics. We will see millions of student loans written off and defaulted on, and all of us that dutifully paid off our loans will be the ones who really lose. I’m still trying to figure out what I will tell my boys when it is time to go to college.
Governments don’t lie. The central bankers who own governments do.
You won’t want to send your boys to college in the US, since college will be a way of indoctrinating them into communitarian sustainability, and they will be taught that their parents and the old ways are outdated and not worth protecting.
College debt will be written off via active military service. Students will serve the central bankers and support the sustainable development movement, in order to gain their freedom from debt and the severe lack of freedom that will most assuredly come with debt (inability to leave the US, etc.).
Welcome to the future.
Student loans are also relevant for medical and law school students. Those are certainly not pointless degrees. Exhorbitant interest rates are a slap in the face when we get 0 % on savings from the bank, no?
It’s also a slap in the face when schools can raise tuition by however much they want and not harm their enrollment, knowing the government will pick up the slack with low interest rate loans.
Communitarianist socialism seeks the end of compounded interest; this is as a means of wealth redistribution.
the college diploma is like herpes. if everyone has it, it is no big deal.
Learning how to learn is more important than what you learn.