Top

blog

Stories

 

Student Loan Rates Double, Missouri College Groups Push For Action In D.C. To Stop Hikes

Categories: Education, News

umsl-file.jpg
via Wikimedia Commons
University of Missouri St. Louis.
As of yesterday, interest rates for new student loans will officially double, which, for some college students in Missouri, could prove to be particularly burdensome. Congress will meet again next week after the July 4 holiday and several organizations in St. Louis and across the state are working to increase pressure on local lawmakers to find a solution in Washington D.C.

"This rate hike would be really detrimental," Courtney Hayes, a 21-year-old senior at the University of Missouri St. Louis, tells Daily RFT last week. "And if it goes up, it's probably only going to go up from there." Hayes is an organizer with the UMSL chapter of a group called Young Activists United and has been helping coordinate recent student loan advocacy efforts.

If Congress does not come up with a fix, how would the doubled interest rate impact Missouri students?

The Subsidized Stafford loans in question -- which account for roughly 25 percent of all direct federal loans -- doubled yesterday from 3.4 percent to 6.8 percent. This could be a roughly $2,600 cost passed on to students, according to Congress' Joint Economic Committee, the Associated Press reports.

courtney-hayes-debt.jpg
Courtesy of Hayes
Courtney Hayes.

Hayes argues that inaction at this point is unacceptable and that at a non-traditional campus like UMSL, the damage of increased rates can be especially severe for first-generation college students, part-time students, low-income students and others.

"Taking out these student loans does cause a lot of anxiety," says Hayes, who is studying political science and hopes to go into union organizing after she graduates.

"I know I'm not going to make much money with that," she says of her career goals and personal concerns about doubled rates.

In her campaign to spread the word, Hayes says she has talked to many students who share these worries. "Most of their anxiety is being able to find a job and to pay off that debt. We know that jobs are scarce."

Hayes, who is from north St. Louis county, has been involved in the organization since November of last year and has been working on collaborating with other groups in Missouri and pushing a social media campaign to raise awareness.

Of Missouri lawmakers, she says, "They need to act and stand up for students in their state."

She notes that student loan debt has exceeded $1 trillion, a figure which makes the doubled rates all the more absurd.

dont-double-my-rate.jpg
via Facebook

The Missouri Students Association in Columbia has also increased pressure on local lawmakers to avoid doubled rates. In a letter sent last week, Nick Droege, student body president, notes that the federal government extended subsidized loans to 13,761 University of Missouri-Columbia students in 2012 alone (according to the Missouri Coordinating Board for Higher Education). He writes in a letter to Congresswoman Vicky Hartzler:

These 'cheap' loans expand economic opportunity to many Missourians who otherwise would be trapped in a poor job market with nothing more than their high school degree.

Students at the University of Missouri recognize the harsh realities of sequestration and the tough environment that you and your colleagues in Washington D.C. face as you strive to find a solution to this problem. I, along with thousands of other students at the University of Missouri who I represent, support any bipartisan solution that will save our peers from an economic peril that threatens their ability to gain a higher education.

Here's another statistic via the social media campaign that Hayes is helping organize.

missouri-student-loan-stat.jpg
via Facebook

Meanwhile, Emily Koehler, a local organizer with Young Activists United St. Louis, traveled to the East Coast last week to participate in a meeting with Delaware-based Sallie Mae, the nation's largest student lender, which, she argues has aggressive debt collection practices and fees -- and has only fueled this crisis.

"Higher education is becoming the key ingredient to obtaining a high-paying career," Koehler, a recent UMSL graduate, tells Daily RFT. "For students, it's becoming more important than ever that they are able to access and pay for higher education."

Koehler, whose group was part of a coalition fo students meeting with the company, says that the executives of Sallie Mae were resistant to their ideas.

"It was a troubling meeting," she says. She argues that a private company like Sallie Mae, which contracts with the government to service loans, is driven by profit and does not prioritize helping students.

You can read more about the group's demands and perspective on the meeting last week here.

A Sallie Mae spokesperson sent Daily RFT a statement on the meeting, saying, "We were pleased to share how we help students graduate with less debt and how we modify loans to reduce interest rates for those who experience difficulty in repayment."

The Senate may debate this issue once again when it resumes on July 10.

Here's the full letter from the Missouri Students Association.

Missouri Students Association

Send feedback and tips to the author. Follow Sam Levin on Twitter at @SamTLevin.

My Voice Nation Help
16 comments
Tim Johnson
Tim Johnson

BOTH sides had plenty of opportunity to oppose this before it started, and fix it since it went into place. BOTH sides are responsible for this mess, like most things in government it isn't a partisan issue, but it can always be framed that way to many people.

Steve Mincer
Steve Mincer

thank them for trying to keep loans in the free market.

Steve Mincer
Steve Mincer

exactly. because in liberal world the government is WAY better than the "evil" free market...THEN when ( as it always will ) the government screws it up...they can blame republicans.

Steve Mincer
Steve Mincer

"President Obama will sign a bill today that ends a 45-year-old program under which banks and other private-sector lenders such as Sallie Mae receive a federal subsidy for making government-guaranteed college loans. Instead, the U.S. Department of Education - which already makes roughly a third of these loans through its direct-lending program - will make 100 percent of them starting July 1." http://www.sfgate.com/business/networth/article/Feds-take-over-student-loan-program-from-banks-3193888.php they were a "problem" because people didn't take responsibility and pay for those loans. now, instead of personal responsibility, we gave the government control over them. never a good plan.

Steve Mincer
Steve Mincer

what part of "obama signed the bill giving government control over loans" are you not getting, dip shit.

Lori Franke
Lori Franke

Interest rates are doubling on subsidized loans - the interest rate on unsubsidized loans, where eligibility is based on a student's parents' income, is already 6.8%. Why is a student's interest rate on their student loans based on their patents' income, when the ability to pay it back as a graduate has nothing to do with the parents' income? It's the student's loan, not the parents' loan.

Tim Johnson
Tim Johnson

Why weren't they screaming loudly when the government took over the student loan industry in the first place?

Jay Brandt
Jay Brandt

Students...go to the next Young Republicans meeting on your campus and thank them personally!

Steve Mincer
Steve Mincer

because they know that no matter how high they make that tuition...the government will just raise taxes to make the loans to pay for it. kinda funny how that works out, huh?

Steve Mincer
Steve Mincer

nice try at dodging the real issue, though.

Steve Mincer
Steve Mincer

it's not a "government in general" problem when obama signed the bill that took student loans away from the free market.

Steve Mincer
Steve Mincer

ya...because walmart pays like no taxes, right?

Rick Kohn
Rick Kohn

tuition is what has gotten out of control!!!

Steve Mincer
Steve Mincer

people blaming this on republicans ( even though obama signed the bill giving government control over loans ) in 3...2...1...

Sara Ivie-Trankler
Sara Ivie-Trankler

Tax Walmart, raise interest rates on banks that borrowed and leave us the fuck alone.

Now Trending

From the Vault

 

Loading...