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The Daily Wildcat

The Daily Wildcat

 

Loan interest rate may double

With an interest rate cap set to expire in July, student organizations around the nation are lobbying Congress to keep Stafford subsidized loan rates from doubling.

Associated Students’ Association representatives from each university in the state traveled to Washington D.C. in March to lobby at a federal level. These representatives lobbied legislators about the importance of Pell grants, need-based grants awarded to low-income students, and keeping interest rates low on Stafford loans, forms of federal financial aid aimed at helping college students finance education.

Tyler Dowden, an intern for the association and a political science freshman at Northern Arizona University, was one of these representatives.

Dowden spoke at a news conference on Capitol Hill, which centered on Stafford loans and the possible increase from a 3.4 percent interest rate to 6.8 percent. Students also voiced their opinions through more than 130,000 letters delivered to Congress, asking for interest rates to remain at the current rate, Dowden said.

“I feel like if the interest rates double it would have a harsh impact on me, personally,” Dowden said. “It limits my career options in the fact that I have to look for a job that I’m not passionate about, but that pays me money. I can’t be in a career where it pays nothing when I have to pay years of Stafford loans as well as my cost of living.”

Alisha Raccuia, a psychology senior and ASA director at the UA, also lobbied in D.C. She said that they spoke with senate staffers about federal policy priorities and focused a lot of their discussions on the doubling of the interest rates for Stafford loans.

“My personal belief is that we really need our federal government and state government to realize that education is an investment,” Raccuia said. “It’s an investment in our economy and in our futures, and it’s essential for them to do anything they can to make school and higher education as affordable as possible.”

Less than half of the students enrolled at the UA have student loans, according to John Nametz, director of student financial aid.

“I think if interest rates double this will add to student debt. Students will be paying interest on the interest and the higher the interest rate, of course, the more you end up paying as a whole,” Nametz said. “I would encourage students to get in touch with their student government so they have a combined and unified response to this.”

For some students, the thought of Stafford loan interest rates doubling is not too troubling, but might be discouraging for other students.

“I’ve been lucky in that I’ve never really had to take out loans and I still have money in the bank, so it won’t affect me because I’ll pay back before interest starts to accrue,” said Ben Gorham, a classics graduate student who has taken out Stafford loans for two years.

Gorham said he didn’t take out loans before attending graduate school.

“However, students are generally in debt already and this isn’t going to really encourage people to pursue a continuing education if it’s going to put them deeper in debt,” he said.

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