On Tuesday, the UC Berkeley chapter of CALPIRG participated in a nationwide day of action in order to bring light to increasing student loan interest rates.
The theme of the day of action was “Deflate your Rate,” referring to the ballooning interest rate that subsidized Stafford loans could see this July. At the event, CALPIRG took pictures of students holding balloons that read “Deflate the Rate,” symbolizing the increase in interest rates that subsidized Stafford loans face.
“It is metaphorical way of saying that college should be more affordable and that Congress can do something about it,” said CALPIRG member and co-event coordinator Kate Uyeda.
Offered to students who display financial assistance to fund their education, Stafford loans are fixed rate federal loans offered to students by the federal government. Currently, subsidized Stafford loans have a fixed interest rate of 3.4 percent — however, this could double in July if existing legislation is not renewed.
According to co-event coordinator and CALPIRG member Sofie Karasek, Congresswoman Barbara Lee has already signed on to oppose the interest rate hike. But renewing the legislation will need as much support as it can get.
The event hoped to catch the attention of U.S. Senator Dianne Feinstein, D-Calif., and Senator Barbara Boxer, D-Calif., aiming to show leaders in Washington, D.C. that students are aware of and care about their finances when it comes to education, Karasek said.
Since 2007, federal legislation has cut the interest rate of subsidized Stafford loans nearly in half, from 6.8 percent to 3.4 percent, over the course of four years. However, the law is set to expire on July 1, and if it does, the interest rates will be 6.8 percent once again, according to Uyeda.
Through this event, CALPIRG hopes to emphasize that college expenses are increasing and becoming more difficult to finance.
“We want Congress to realize that they can deflate ballooning interest rates and make college affordable again,” Uyeda said.
Other CALPIRG chapters across the country also held days of action on their campuses asking their legislators not to let the interest rate double in July, according to Karasek.
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Anything planned for http://1tday.org/? an old blue still paying off student debt. @Lioness7 (Twitter).
Calpiprg is a bunch of crap
Americans now owe more on student loans ($1 trillion) than on credit cards. Artificially lowering the student loan rates simply encourages more students to take more loans, which encourages private and public colleges to raise tuition and fees, and one day the bubble could burst just like the subprime mortgage bubble.
…uh, perhaps interest is also contributing to that $1 trillion figure? The increased rate probably won’t dissuade the people who need them, but it WILL affect their prospects post-graduation.
Those who get accepted at the most expensive universities in the most expensive cities don’t necessarily have to go there if they can’t afford it. Educators always tell students “worry about getting accepted first, then the financing will take care of itself.” I bet that’s what the mortgage brokers told minimum-wage clerks who bought half-million dollar homes with government-backed subprime liar loans. Universities know exactly what the government is subsidizing and will raise fees to soak up every last penny. None of the university financial aid workers will tell a student that, honestly speaking, they only stand a 10% chance of repaying a $100,000 loan with a degree in Ethnic Studies. After all, it’s the taxpayers’ problem.
However, I feel sorry for the students too. It’s tough finding a job, and the difference between a high-paying career and a gig at Walmart may be the prestige of the university he or she attended. If the high-paying jobs never materialize, how will the loans be paid off?
Artificially lowering the Stafford loan’s interest rate won’t change anything. Those who can’t repay will still default. Those who can repay will be getting an unnecessary rate cut. The only sure thing is that universities will raise tuition and fees and push students to take advantage of the lower Stafford interest rates.