It happened. There were months of debate. Representatives in the house submitted their plans. Senators offered their plans. Alarm bells about the dangers of the student loan crisis were rung. For a while it even seemed that the democrats AND the republicans agreed that something needed to be done. In the end, nothing happened. As of today, July 1, 2013, interest rates on Federal Stafford Loans are now 6.8% – exactly double what they were just yesterday.
As I am neither a politician nor a political scientist, this entire student loan interest rate debate was a real education to me. I created this website to help people manage their student loans, and because this debate affected many of the people I seek to help, I have been a close watcher of recent events. Over the past few months I have learned a lot about our government, its people, and the realities of the student loan debt.
Here are the lessons I learned:
- Even if all members of the Senate agree on something, it doesn’t mean that a bill will pass. Seeing how close to a consensus everyone was and how we ended up with a law that nobody wanted was especially difficult to watch.
- The change in the student loan interest rate could cost borrowers thousands of dollars. However, in many ways, it does not matter. The real problems facing higher education and funding are the high price of college and the absence of consumer protections in lending. Lower interest rates would not do anything to solve this problem.
- Last year the federal government made $51 billion on student loans. Today they doubled interest rates. Not only does this just seem like bad fiscal policy, it just seems wrong for the country to profit off of students trying to further their education. Even if you dispute the profit margin, the fact that there is a profit margin on these loans is bothersome.
- Good people are suffering because of this problem. It is devastating to see how people who seek only to live the American dream, and do nearly everything right, can end up in such dire financial circumstances.
- I’ve been lucky to meet some really amazing people. One of the awesome things about the internet is how fast great ideas and knowledge spread. Our government may have its flaws, but this country is full of greatness, and I have no doubt that we will find our way out of this mess.
Even thought the results were not what I would have liked to have seen, I’m really looking forward to refocusing on guiding people who are trying to deal with their student loans. I’ve already begun the research on articles to help people get their loans out of delinquency status, and also for defaulted loans. I’m also working on an in depth analysis of how student loans can affect your credit and how your credit can affect your student loans.
This site is still relatively new and in many ways it is an experiment in progress. If there is anything that you would like to see changed, odds are there are many others who feel the same way. Please let me know. Constructive criticism is the most efficient way to make this the best resource possible.
As always, if you have any questions regarding your student loans or would like any advice, please feel free to ask.
How do you feel about the doubling of student loan interest rates?