The student loan interest rate increase: missing the forest through the trees
For whatever reason, I started receiving mass emails from Dave Loebsack, my US House Representative. I am not going to complain since he is my Congressman, and I like the fact he and his staff are making an effort to connect with constituents. But I do not understand why I started receiving his emails all of a sudden. Hmm.
Anyway, Loebsack’s email today was about the impending interest rate increase for new student loans. Here is the skinny from the email:
I am not exactly sure if the interest rate mandate is for all student loans, public and private, or just public loans. Regardless, this does not affect me directly since I do not plan to return to school. Plus — not that this would matter anyway, but I thought I would gloat — I paid off the last of my student loans over three years ago. (I remember the day I mailed my last payment. It was a sunny, fresh SoCal spring morning. I had the day off and was flying to Honolulu in the afternoon to “attend” a conference. I woke up late, walked to the post office in downtown Huntington Beach, and dropped my last payment to Iowa Student Loans into the mailbox. Afterward I walked to the beach, let the waves lap my feet and legs, and then walked home and drove to LAX. Hours later in Waikiki, I let the waves lap my feet again. Not only did I pay off my student loans that day, I stepped into the Pacific Ocean at two separate locations, thousands of miles apart, on the same day.)
In a certain way I was lucky: the only student loans I took out were for my stay at the fabulous Mayflower dorm my freshman year. (I essentially paid something like $8,000 to live in a cinderblock box. I would have been better off renting an apartment.) And though I had to pay my own tuition after losing my DI scholarship, I would not have wanted it any other way. The thought of taking out more loans to pay tuition disgusted me. I preferred working all summer, scheduling classes around work in the fall and spring, and living as sparingly as possible. Sure, I may have needed to live in my parents’ basement, lend books for my English classes from the library, and wear cargo pants with a hole in the groin, but at least I was not deep in debt, not paying more later. And when I was blessed enough to land a good job, I made sure I paid off what I did owe so I was done with student loans — forever.
But not everybody can play it as smoothly as I did. (Honestly, I probably could have done much better, but I am not complaining.) Not everyone is lucky enough to go to college in their hometown. College is expensive and almost everybody uses student loans as a stopgap to not only pay for school but also food and housing (and maybe other, frivolous things they can do without). Which is one of the pathetic ironies of the debate about the student loan interest rate: no matter what, an advanced education in the United States is still prohibitively expensive. Dave Loebsack can argue for keeping the student loan interest rate at 3.4 percent until he is blue in the face, and Congress can vote to make it so. But that still does not solve the real problem. He and Congress are still feeding American college students to the racketeering wolves in the banking sector. Admittedly, nobody is forced to go to college and take out loans. But, as I said, the soaring fees of public education make loans a necessity. Even I, the dedicated cheapskate, could not avoid them.
Later in his email, Loebsack says:
Albeit, contractually obligated to repay loans at interest.
Though I think Loebsack is a decent enough guy (despite having never voted for him) I think he would be better off fighting to make higher education more affordable than bickering about the interest rate of the status quo.
Anyway, Loebsack’s email today was about the impending interest rate increase for new student loans. Here is the skinny from the email:
In only one week on July 1st, the interest rates on new student loans are set to double from their current rate of 3.4 to 6.8 percent. Unless Congress acts to stop this increase, as I have long been pushing for, students will pay an additional $1,000 for each year that they take out loans to pay for their education.
I am not exactly sure if the interest rate mandate is for all student loans, public and private, or just public loans. Regardless, this does not affect me directly since I do not plan to return to school. Plus — not that this would matter anyway, but I thought I would gloat — I paid off the last of my student loans over three years ago. (I remember the day I mailed my last payment. It was a sunny, fresh SoCal spring morning. I had the day off and was flying to Honolulu in the afternoon to “attend” a conference. I woke up late, walked to the post office in downtown Huntington Beach, and dropped my last payment to Iowa Student Loans into the mailbox. Afterward I walked to the beach, let the waves lap my feet and legs, and then walked home and drove to LAX. Hours later in Waikiki, I let the waves lap my feet again. Not only did I pay off my student loans that day, I stepped into the Pacific Ocean at two separate locations, thousands of miles apart, on the same day.)
In a certain way I was lucky: the only student loans I took out were for my stay at the fabulous Mayflower dorm my freshman year. (I essentially paid something like $8,000 to live in a cinderblock box. I would have been better off renting an apartment.) And though I had to pay my own tuition after losing my DI scholarship, I would not have wanted it any other way. The thought of taking out more loans to pay tuition disgusted me. I preferred working all summer, scheduling classes around work in the fall and spring, and living as sparingly as possible. Sure, I may have needed to live in my parents’ basement, lend books for my English classes from the library, and wear cargo pants with a hole in the groin, but at least I was not deep in debt, not paying more later. And when I was blessed enough to land a good job, I made sure I paid off what I did owe so I was done with student loans — forever.
But not everybody can play it as smoothly as I did. (Honestly, I probably could have done much better, but I am not complaining.) Not everyone is lucky enough to go to college in their hometown. College is expensive and almost everybody uses student loans as a stopgap to not only pay for school but also food and housing (and maybe other, frivolous things they can do without). Which is one of the pathetic ironies of the debate about the student loan interest rate: no matter what, an advanced education in the United States is still prohibitively expensive. Dave Loebsack can argue for keeping the student loan interest rate at 3.4 percent until he is blue in the face, and Congress can vote to make it so. But that still does not solve the real problem. He and Congress are still feeding American college students to the racketeering wolves in the banking sector. Admittedly, nobody is forced to go to college and take out loans. But, as I said, the soaring fees of public education make loans a necessity. Even I, the dedicated cheapskate, could not avoid them.
Later in his email, Loebsack says:
As I have shared with many of you, I grew up in poverty and would not have been able to attend college and pull myself up by my bootstraps without the assistance of student aid programs like federal student loans. It is so important that all of our young people have the same opportunities to build a new life through education.
Albeit, contractually obligated to repay loans at interest.
Though I think Loebsack is a decent enough guy (despite having never voted for him) I think he would be better off fighting to make higher education more affordable than bickering about the interest rate of the status quo.
