Jun 26, 2012 6:26 PM by Erin Steuber
The inaction of Congress, so far, to stop subsidized Stafford college loan interest rates from doubling, has student leaders across Louisiana taking action. That includes UL's Student Government President. Interest rates would increase from 3.4% to 6.8%. Without Congress stepping in, the change will go into effect July 1.
"It's scary because you grow up your entire life, and you're told you can go to college and you can do whatever you want, graduate and get a job," said UL's SGA President Ashley Mudd. "Right now we don't have a very good economic climate,
so adding increase loan rates is so much more scary."
Subsidized Stafford loans are one of the most popular loans for students. The appeal, the low fixed rate, and the government pays interest while students are still in school or in deferment.
"We tell everyone you can do what you want in this country, you make your own self worth, but then we're penalizing the students that come from families with less income by increasing their student loan rates," said Mudd.
Mudd joined together with other student leaders across Louisiana, writing a letter to Congress expressing their concern. They say with the extra burden of, even more, college debt students will have to put their lives on hold. Not being able to afford their first home, car or making investments within the next decade.
"It's like, ok, not sure that I'll have a job when I graduate, but here's more interest that you have to pay on the loans that you've been getting to get a job," said Mudd.
Mudd says the only way Congress is going to stop the change is if everyone speaks up.
"You know we're important on our campus and we wrote letters, but it's also important to have everyone else on campus writing those letters and getting their voice out there," said Mudd.
"Oh it's gonna hit me like a ton of bricks, 'cuz I'm also doing grad school. So it's actually more loans that I have to take out," said UL senior Jasmine Smith.
"You work so hard through college, then you have this giant amount of debt that's built up and it's just not really helping anybody at this point in time," said UL junior Matthew Zada.
"Oh my God, like, I don't know what I'm going to do if it goes up," said UL senior Lam Nguyen.
According to the Department of Education, more than 7 million students are expected to get new Stafford loans, borrowing an average of about $4,500 per loan. If the interest rate doubles, that means students will be paying an extra $1,000 in interest.