The Clock Ticks On
Time's up!. As expected, interest rates for new subsidized federal student loans rose this morning from 3.4 percent to 6.8 percent as Congress adjourned for its Independence Day break without reaching a compromise. Despite missing the deadline, Congress still has time to fix the issue before students begin classes in the fall and apply the fix retroactively. However, if Congress fails to find a solution prior to its August recess, significant problems for students could be the result. So how did we get here and which proposed…
Politics as Usual in Washington Hurts Students and Families
U.S. Senator Joe Manchin III (D-W.Va.), joined by fellow Senators Lamar Alexander (R-Tenn.), Richard Burr (R-N.C.), Tom Coburn (R-Okla.) and Angus King (I-Maine) will introduce a proposed compromise plan today tying the rate for undergraduate Stafford loans (both subsidized and unsubsidized) to the 10-year Treasury bill plus 1.85 percentage points. As an advocate for student borrowers, I don't like it. Any student loan interest bill that reduces the deficit (including this latest version), does so by adding additional costs for students…
Caught in the Middle: Too Rich for Financial Aid, Too Poor to Afford Tuition
Tuition hikes in Washington state are being disproportionately felt by students of middle-class families, The Seattle Times reports in an article today. “We’re on the cusp of creating a higher-education model in this state that only works for the very wealthy and the very poor,” said state Sen. Michael Baumgartner, R-Spokane. Not long ago, students could reasonably expect to work 1-2 jobs throughout the summer to cover in-state tuition, student fees, and living expenses for each upcoming school year at a public university…
Congressional Joint Economic Committee Issues New Report on Student Loans
The Congressional Joint Economic Committee released a new report Tuesday on student loan borrowing as debates continue on the future of subsidized Stafford loan interest rates. Student loan debt has risen nearly two-fold in five years, according to the report, “The Causes and Consequences of Increasing Student Debt.” Among the report's key findings: Two-thirds of recent graduates have student loans, with an average balance of more than $27,000. On average, recent graduates left college with student loan debt of 60% of their…
Senators Reintroduce Bill to Standardize Student-Aid Award Letter
U.S. Senators Tom Harkin (D-IOWA) and Al Franken (D-MN) reintroduced legislation Friday that would require all American colleges and universities to issue a standardized student finanacial-aid award letter to students and their parents applying for such aid. The Understanding the True Cost of College Act (S. 1156) would require institutions to use a standardized letter that would specify financial factors like the cost of attendance, grant aid, eligible amounts of federal student loans, expected monthly loan-repayment amounts, and disclosures…
