The Senate has postponed making a decision on a July 1 interest rate increase on federal college loans that would affect more than 7 million students.
The law threatens to double interest rates on Stafford loans come July, and Republicans and Democrats in the Senate can’t agree on funding plans to keep interest at the lower rate of 3.4 percent. The Senate voted on the matter before Memorial Day and the both parties’ plans fell short of the 60 votes needed for approval.
Officials say the nation cannot afford the $6 billion annually it would cost to compensate for the lower interest rates according to a recent CNN article. Efforts to resolve the problem have been pushed back until next month.
Nationwide, college students who graduated in 2010
left college with an average student debt of more than $25,000, according to The Project on Student Debt. Students are forced to rely on their loans due to the increasing cost of tuition.
The average CSUN student graduates with a debt of more than $15,000, and nearly 40 percent of the student body will be in debt upon graduation according to The Project.
“The increase would be ridiculous,” said CSUN Senior, Amber Canyon. “It’s already difficult enough for students to go to school because of the cost. Not to mention the stress and difficulty related to being in debt after graduation. Doubling the interest will just make it that much harder to pay for school. I’m so happy I’m close to graduation.”
The cost for a student to attend CSUN has increased more than $500 in the past academic year. This tuition increase excludes the nearly $1,700 needed for books and other supplies for the academic year, according to the CSUN financial aid department.
“It creates a lot of anxiety for me,” said Canyon. “I’m always worried about how I am going to pay for things and sometimes I find myself worrying about bills that haven’t even come yet. There literally aren’t enough hours in the day to work as much as I need to in order to support my cost of living and education while still attending school.”
Canyon, who lives alone and commutes to CSUN from Los Angeles, works part-time as a receptionist at a gym and attends school full-time.
Apart from the financial burden of student debt, unemployment is currently over 11 percent according to the California State Employment Development Department. In the current economic climate, students who are dependent on loans find it difficult to pay them back after graduation, with or without the increased interest rates.
“It’s scary,” said CSUN Junior, Tasnim Hanefy. “I’m not guaranteed a job right after college and I don’t know what 6.8 percent of my total student loan will be when I am finished, I don’t even want to do the math. It’s such a daunting task. It makes me want to stay in my room and hide.”
In Western states such as California, there tends to be less student debt than the Northeast and Midwest states because more students attend public four-year colleges such as CSUN.