The student loan crisis in the USA continues to grow and this summer the interest rate on federal student loans will double if Congress doesn’t take action. Only in the United States can Congress NOT doing something actually get something done and that might be the most important if not the saddest lesson that our college students will learn…
Last year, Congress delayed the doubling of the interest rate on federally subsidized student loans from 3.4% to 6.8%. which is what the rate will jump to in July should Congress fail to act this time around…Isn’t it nice that Congress likes to set these deadlines in such frequent intervals virtually setting up a nonstop game of Russian Roulette with their constituents lives…not exactly what our founding fathers had envisioned to be the role of the leaders of the free world do you think?
If the student loan interest rates double on July first and increases from 3.4% to 6.8% this could result in the equivalent of adding $5,000 to new federal loans for college students and their families.
Since 1999, the average student loan debt has increased by over 500% while the interest on loans that the big banks get from the Fed have steadily decreased… despite the fact that these banks worked hard to bring down our economy in 2008 and then held it hostage until they got what they wanted in massive bailouts from the very taxpayers whose children now face a future of massive debt owed to…these very same banks!
You couldn’t write a more insidious crime story if you tried!
And don’t forget that federal student loans with low interest rates, such as the subsidized Stafford loan, are designed to benefit students whose families make under $50,000 a year and these are people who certainly cannot afford to see their interest rate jump…unlike Congressmen and bankers who I am sure never have to worry about taking out loans for their children at all since they can no doubt use their “lobbying proceeds” to cover such bills.
However the one flashlight at the end of this dark tunnel of bank and government…congress…is Senator Elizabeth Warren of Massachusetts who has introduced legislation entitled the Bank on Students Loans Fairness Act that would provide a one-year fix by setting the student loan interest rate at the same level the Federal Reserve offers to big banks which is, believe it or not, 0.75%. That’s 9 times less than students would pay if the Congress does nothing.
So, what will our Congress do? Stand up to the banks for the love of our children…or just lie there and do nothing and let the banks make love to them? Either way, let’s hope our children don’t get it in the end.