Interest rate hikes hit hard for students
The U.S. Senate today failed to move forward on a plan to restore lower interest rates on student loans. The Democratic bill would have held interest rates on subsidized stafford loans at 3.4 percent for a year. Rates doubled to 6.8 percent on July 1st.
Senator Debbie Stabenow says it's important to focus on making sure people have access to affordable college, but it's up to the students now to make their voices heard.
â??I think it's a big thing for students to get involved in the education community,â?? says student Tadd Kaiser.
Kaiser is a student at the University of Michigan, but he's also taking advantage of cheaper classes at Northwestern Michigan College, which is something many students may have to consider.
â??Based on the emails and conversations I've had with students around the state, it affects their decision about going to college.â?? Senator Stabenow says she knows that student's costs are through the roof, and it's time to make affordable tuition a priority.
â??This is in our interest as a country to make sure students aren't coming out with mountains of debt,â?? says Stabenow. Thatâ??s debt that many students don't start thinking about until six months after graduating.
â??A lot of student's from our generation don't fully understand the gravity of what these loans are going to mean in the future,â?? poses Kaiser.
Perhaps a bright spot amidst higher interest rates is that students will put more focus on their direction and overall educational plan, thatâ??s according to Pam Palermo, financial aid director at NMC.
â??When they're paying a higher interest rate, it behooves them to finish their program sooner and not borrow so much so that they're not paying so much in the end,â?? says Palermo.
For some, taking out smaller loans just isnâ??t an option. â??I do not think that I would take those loans out, but for many students and even for myself, I don't really have a choice,â?? says Kaiser.
One of the most important things to consider is how much money you really need to borrow. Palermo suggests only taking out the maximum loan if you really have to in order to cover tuition, fees, and books.
Senator Stabenow says the chairman of the committee that oversees higher education is working on legislation that would revamp a whole range of things to lower costs. That should be brought before the Senate later this fall.