Washington – The good news is that Congress has increased the opportunities for Americans to obtain student loans.
The bad news is that those loans will now be more expensive.
Despite rising tuition costs and mounting student debt, Congress has voted to raise interest rates on federal student loans at a time when many are struggling to pay off their debt. Even some members of Congress who earn $165,200 a year are still paying off student loans.
Those loans have become a major burden for many, including the Knox family in Madison, Wis.
Isadore Knox, 51, and his two daughters, Jennifer, 21, and Candace, 22, all have federal student loan debt. Isadore also has three younger children who might attend college.
“Congress should play an active role in making education less expensive,” said Isadore, a Dane County equal-opportunity official.
He has $15,000 in student- loan debt. His two daughters already have combined debts of about $15,000, an amount that is likely to increase before they graduate.
For graduating seniors, the average student debt is about $19,000, financial-aid experts said. Graduate students have an average debt that ranges from $19,900 to $105,000 for medical students, a figure that includes undergraduate college costs, according to the Department of Education.
Tuition costs have jumped by 32 percent at four-year private colleges over the past 10 years and 41 percent at public universities, according to the College Board. Average tuition and room-and-board fees at private colleges are $29,000; at public universities, they average $12,000.
Isadore said he and his wife, a state probation officer, saved for their children’s education but could not afford to pay for all their daughters’ college expenses, despite their annual income of $135,000.
In July, interest rates on new federally backed student loans will be fixed at 6.8 percent as a result of the legislation Congress passed in February. Students now pay 4.7 percent in interest while in school and 5.3 percent after graduation, with an interest cap of 8.25 percent.
Congressional aides can get up to $40,000 in loans repaid and federal workers up to $60,000. Lawmakers get no repayments.
The debate over student loans is personal for lawmakers such as Cathy McMorris, R-Wash., and Linda Sanchez, D-Calif., who both have federal student-loan debt.
McMorris has $16,000 in debts remaining on loans she used to pay for her master’s of business administration at the University of Washington.
She said she is a strong supporter of student loans and is co-sponsoring legislation to retain funding for federal Perkins loans for low-income students that President Bush has proposed to eliminate in 2007. She says she voted for the increase in rates because it also raised federal loan limits for undergraduates and graduate students.
Sanchez said she voted against the bill because it represents “Congress’ totally screwed-up set of priorities” when student debt and tuition are increasing.
Sanchez still has to pay off about $45,000 in student debt remaining on loans she used to get her law degree at UCLA.
Sanchez said Congress is sending the wrong message to its constituents by not making college more affordable for all.
“Congress is saying: ‘I’ve got mine, good luck to the rest of you,”‘ Sanchez said.
