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Loan debate hits close to home

May 4, 2012
By CHRISTINE WEATHERMAN , Tribune Chronicle | TribToday.com

As the number of columns I have left to write dwindles (sigh), I've decided to spice things up a bit in the few that remain and go out in a blaze of glory. Even though some of my readers have encouraged me to throw my hat into a more politically motivated ring, until now I've chosen to pen my topics with a more lighthearted and amusing tone, reasoning that the rest of the "A section" tends to be a little heaver in subject matter.

Earlier this week as I watched a C-Span debate on television, I heard something that almost made me choke on the cold beverage I was enjoying. The government is in a heated debate over whether or not to double the current federally subsidized student loan interest rate this coming July. The current interest rate of 3.4 percent is scheduled to leap to an astronomical 6.8 percent if Congress doesn't do something to stop it.

According to www.huffingtonpost.com last Friday, the House of Representatives advanced a bill that funds cheaper student loans by cutting a preventive health care program for cancer screenings, immunizations and smoking cessation and nutrition programs. Cutting out this funding will reportedly save $6 billion in the federal budget.

Democrats say that cutting this health care program "attacks women's health care" but the GOP maintains that even if the funding is cut, money will still be available for these types of programs. One thing lawmakers on both sides of the aisle can agree on is that the election-year timing for this legislation couldn't be worse; that no matter which way things end up, lots of people will be very angry.

The doubling of the interest rate will affect more than 7 million people with more than $950 billion in student loan debt (a mind-blowing figure that includes amount owed by the author of this column). Economists say that Americans now owe more on student loans that on credit cards. Two out of five Americans with federal student aid cannot make the payments and are either in default or in a deferment or forbearance period.

I am certainly no economist, but if almost half of the people with these loans are unable to pay them off now, please explain to me how doubling their interest rates will help the government get their money any faster? Upon my graduation from college in 2008, my student loans amounted to around $14,000. Almost four years later, my personal federal debt had risen to more than $16,000 and my interest rates are actually higher than the current average.

Since relocating back to my native Ohio almost two years ago, I've learned the hard way that it's just as difficult now to find a good job as it was then. The overall economy is actually worse than when I left for North Carolina in 1996. Ohio's unemployment in 1996 was 4-1/2 percent but now the state average hovers at around 8 percent. It took almost a year of active job searching before I found my current employment (which by the way, I absolutely love). I work very hard and enjoy what I do but find it difficult some months to make that dreaded student loan payment. When forced to choose between family necessities or mailing off that payment, sorry Feds, but shoes, food and bottomless gas tanks come first and always will.

Raising my already overinflated student loan interest rates is not the solution to helping me pay it back any faster. Duh. In fact, not rocket science here, all it will do is make it take that much longer for me to finally celebrate being "Stafford free."

Weatherman is a Trumbull County resident. Email her at editorial@tribtoday.com.

 
 
 

 

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