Sunday, June 09, 2013

Subsidized Student Loan Rates to Increase?

I recently came across an article on and it reminded me of the discussion we had in class about the fact that the rates may be increasing on subsidized student loans. So here are the facts according to the article. On or by July 1st Congress will vote to increase the current rate doubling it to 6.8%. This will affect roughly 7 million undergraduate students. Under the plan, the rates would remain low but increase as the economy improves. This rate increase will only affect subsidized student loans which the federal government currently absorbs some of the interest rate. This is about 1/3 of all student loans given out and these loans are awarded based on economic need. Most students actually take out unsubsidized loans, which the rate has been at 6.8% already since 2007. This rate will remain the same for most middle class students. The article concludes by stating that based on the way things are going we will most likely see the rate increase.

I found the article mostly to be informative and didn't cause much cause for debate... what interested me the most was actually all the comments that were posted below the article. Obviously if you are a student this is an important issue. First of all tuition is expensive. My husband just finished his college degree about two years ago and now I am a student and the loans are definitely piling up. I understand where people are coming from and the frustration they feel behind the increases. What startled me was that there were quite a few comments that stated they thought that college education should be free. College should be free? I find this thought completely absurd. Another comment made really struck home with me. The comment made was that we take things for granted if we don't have to earn it. I couldn't agree more. My first year at college I received a scholarship and the remaining portion of my tuition was paid for with a grant. I was attending college for "free". And let's just say my first year at college was less than productive. I mean I did ok, but I certainly did not try as hard as I could and I dropped some courses half way through. I just didn't care all that much. I finally finished my Associate's degree and then years later I am finally finishing my Bachelor's degree. I am an A student, I have been on the Dean's list and I have received a small scholarship recently. I work my butt off at school and here is why... I am paying for it. I am paying a lot for it. Not only am I paying tuition and fees, but I pay for it with time away from my husband and my three kids. My education means enough for me to take the time away from them and in my eyes, I am going to make it worth it. My perspective has changed so much since that first year right out of high school when I was getting a "free ride". 

So would it be nice if college was "free"? Well my bank account would sure be appreciative. But nothing in this life is free. And if students want a college education the truth is, it comes at a cost. This rate increase is no different than the unsubsidized loan rates right now, which a lot of students are already dealing with. We know what we are signing up for when we take out students loans. If we are unwilling to pay them back, we shouldn't take them out in the first place.

The article can be found here.

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