I went on Twitter today and found that #don’tdoublemyrate was all over the place. That piqued my interest, so I investigated. Apparently, the interest rates for Stafford Loans are set to double in July from 3.4% to 6.8% which, in real life, is an extra $5,000 over a 10-year period for borrowers.
President Obama is asking Congress to not let this rate hike happen, but Republican Congressional leaders are making some valid arguments against holding the interest rates down such as: if a university can pay $1,000,000 for a football coach, then why can’t that money go to lowering tuition costs, or using the generous endowments that universities get to lower tuition, or better yet how about the states step in?
This got me thinking: where does the cost of tuition at a university come from? It’s not some made up magic number that a university comes up with, telling you the value of your education–although it feels that way. Most of your tuition goes to facilities, faculty salaries, utilities, building maintenance, and boring things like that. If you have multiple Nobel Prize-winning faculty members and buildings that are considered cultural landmarks, your tuition will be more. Now, the United States is in a recession where there are not many jobs. So what is a 20-something to do in this economy? Go to school. But if the current rate doubles, those students will be in a big mess of trouble when they finish school and then they may or may not be able to find a job. In this economy, should the government be asking student to pay their fair share of their student loan debt, or should the government keep holding these rates down so the student doesn’t create as much debt? That is the question. And at this moment, even with the thousands of dollars in student loan debt I have, Sallie Mae is a bitch.
I side with the Republicans: keeping the interest rates low is not going to lower the cost of tuition in the long run. We can’t live in a society of short-term fixes–we need real solutions to this complex problem and maybe public outrage and lower attendance numbers will help universities figure out how to lower their tuition costs. Maybe it would be better if kids today work before college, save money, or go to school part-time rather than living for four years in a stunted adolescence and being shocked with the bill at the end.