As Deadline Nears, Students Worry About Loan Hike Congress has a matter of days left to work out a compromise or interest rates on some federal student loans will double. That's left many students concerned their heavy debt burden will only grow.
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As Deadline Nears, Students Worry About Loan Hike

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As Deadline Nears, Students Worry About Loan Hike

As Deadline Nears, Students Worry About Loan Hike

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Melissa Block. In a little more than a week, interest rates on some federal student loans will double. So Congress is running out of time to find a compromise. Five years ago, Congress cut interest rates in half for the most common government student loan, the Stafford Loan. But that expires on July 1st. As NPR's Tovia Smith reports, students are worried.

TOVIA SMITH, BYLINE: Allie Galvin(ph) knew it was going to be a stretch to afford college, even with the merit scholarship she was lucky to get from Boston University. So she's counting on a Stafford Loan to help her cover tuition. But when she showed up at B.U. for an early freshman orientation this week, she was more than a bit disturbed by the idea that her low-interest government loan may not be so low-interest, after all.

ALLIE GALVIN: It's impossible not to think about it, you know, because it's a huge financial burden; and especially, you know, if they double the rates, then it's even a bigger thing to worry about.

SMITH: In the grand scheme of things, the extra $1,000 or so she may pay in interest over 10 years, isn't enough to make her change plans. But it is painful, says her dad, Mike Galvin(ph). The bad economy, rising tuition and more expensive loans all create a kind of perfect storm, driving the cost of college sky-high.

MIKE GALVIN: It's extremely frustrating. It just gets higher and higher. It's going to be expensive.

SMITH: Both Democrats and Republicans say they are in favor of extending the lower rate, but they can't agree on how to pay for it. In fact, many say they're not even trying - figuring there are more political points to be scored for making their opponents look like obstructionists, than by making themselves look like champions. Allie's mother, Michelle Galvin(ph), is appalled by what she sees as pure, election-year politics.

MICHELLE GALVIN: It's just turned it into this game. And these kids are the future of this country, and they're paying the price. And it's ridiculous.

''JACK FLOREY'': Yeah, we're mad as hell - definitely so.

SMITH: B.U. student Jack Florey says he's overwhelmed by the idea that he'll leave BU with $50,000 in debt. [POST-BROADCAST CORRECTION: Since this story aired, NPR has learned that the student did not give his real name, and that "Jack Florey" is an alias.] But he says students are beginning to organize around the issue and press for a more permanent solution.

FLOREY: Well, for large parts of school, I've been unable to afford food, unable to pay my taxes, unable to do lots of things because of how hard it is. I don't feel like anyone in D.C. really realizes what we're really struggling with. And I feel like that's going to boil over, on campuses, pretty soon.

UNIDENTIFIED MAN: So I'm here today to ask Congress to do the right thing, to not further burden us even more.

SMITH: Earlier this month, hundreds of students rallied outside the Capitol; and lobbied lawmakers on Stafford loans, and on the larger issue of college affordability. Tiffany Dena Loftin, vice president of the U.S. Student Association, says the rate hike on Stafford loans is just a drop in the bucket, in relative terms, but still not trivial.

TIFFANY DENA LOFTIN: That's rent for a month. That's textbooks, or to purchase a computer. That's the cost of travel to and from campus. For students that are, you know, 17, 18, 20 years old, $1,000 is a lot of money.

SMITH: Other students, and parents, say Congress is missing the point, bickering over whether to charge 3.4 or 6.8 percent for student loans, when the real question is...

PETE STORM: Should the federal government be in the loan business, to begin with?

SMITH: Pete Storm, from Philadelphia, has a son starting B.U. in the fall. He says Congress should just leave it to private lenders and the free market.

STORM: Why are you legislating a rate that's higher than free market, when your intent is to subsidize education? You're not subsidizing, you're not helping; you're actually hindering. So they should just get out.

SMITH: But students argue, that would be even worse. It's true that private lenders offer some loans at better rates, but they also offer much worse. And students say it would be poor and minority kids who don't have good credit history, who'd end up getting stuck with loans that are much more expensive than even the higher government interest rates they may face after July 1st.

Tovia Smith, NPR News.

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