Did you know that unless Congress acts student loan interest rates could double? This means that on average, students would owe an additional $1,000 in interest on student loan debt. I don’t know many college graduates who can afford an additional $1,000 for anything—especially student loan debt. But one really smart Senator is trying to do something about it.
Currently there are over $1 Trillion in outstanding student loans in the United States. Too Big to Fail: Student debt hits a trillion, by Rohit Chopra
According to credit company Equifax, over ten percent of the loans are more than 90 days delinquent and student loan delinquencies outpace most other loans. Student Debt Will Punish US for Years: Strategist, by Christina Medici Scolaro.
Last month Senator Elizabeth Warren (I heart her by the way!), Democrat from Massachusetts, introduced the Bank on Students Loan Fairness Act. The Act would stop student loan interest rates from doubling and allow students to pay the same interest rate on their loans that the government gives big banks. Makes sense right?!
Did you know that right now banks can borrow money from the Federal Reserve Bank for the bargain basement rate of 0.75 percent? Yes, less than 1%. This means that anything over 1% that they charge borrowers (you and me) is ‘profit’ on the loan. The interest rate on subsidized Stafford Loans is currently 3.4%, and will double to 6.8% for new loans if Congress fails to pass Senator Warren’s common sense bill.
There are three things you can do to support Senator Warren’s bill and to work on reducing your student loan debt.
First, if you or someone you love has student loan debt, check out the ReadyforZero.Com student loan resource center. Here you can learn how to better manage and eventually eliminate your student loan debt.
“About one-third of millennials say they would have been better off working, instead of going to college and paying tuition.” Student Loan Problems: One Third Of Millennials Regret Going To College, by Halah Touryalai, Forbes Magazine.
Second, sign the US Action and US Student Action petition and let your members of Congress know that you expect them to support Senator Warren’s Bank on Students Loan Fairness Act.
According to the Federal Reserve, the total amount of student loan debt has risen by 275 percent since 2003. The Student Loan Delinquency Rate In The United States Has Hit A Brand New Record High by Michael Snyder.
Finally, share this news with as many students you know! It is important that we speak out as a LARGE group of voters. As long as folks are in the dark they won’t be able to join with us to do something about this serious issue.
A college education remains one of the most important pathways out of poverty. Let’s not make sure that high interest rates are not the reason that thousands of bright, resourceful and worthy students are locked out of higher education.