.

Congressman, Students, Ministers Urge Action on Student Loan Interest

At Wayne State University in Farmington Hills, U.S. Rep. Gary Peters gathers advocates to urge support for legislation that will prevent Stafford loan rates from doubling.

If federally subsidized Stafford student loan rates double this year, thousands of dollars in additional interest may hit Walsh College student MiVida Burrus' family doubly hard.

During a news conference Tuesday at in Farmington Hills, the Troy mother of three said her daughter has chosen to follow her example of seeking higher education. Both rely on Stafford loans to cover the cost of tuition.

"Raising the interest rate hurts me, and it hurts my family," Burrus said. "It kind of dampens our dreams and keeps us from believing that we can ever reach the goal that we set out, which is to have that degree, to have that job and be a productive society member."

The family is, by no means, alone. Congressman Gary Peters estimates 7.4 million college students across the nation, 330,000 of them in Michigan, will be hit with about $1,000 in additional interest for each year they attend school if the Stafford loan rate moves from 3.4 percent to 6.8 percent on July 1. 

Peters is among more than 150 co-sponsors of a House bill that would tap gas and oil subsidies to cover the estimated $6.4 billion cost of keeping interest rates at their current level. He said House Republicans last week passed a bill that extends the low interest rates, but took the funds out of public health prevention, including breast and cervical cancer screenings for women and immunizations for children. 

"That's a wrong-headed approach," Peters said. "It pits higher education against public health."

Peters is looking for people to contact their legislators to voice their concern about the possible interest hike.

Royal Oak resident Will Butler, a student at the University of Michigan, said he has needed student loans to cover tuition even though his parents contribute and he works. 

"It isn't right for Congress to make it harder for me," he said. "I'm just trying to make a better future for myself."

Wayne State student Norman Dotson, a Detroit resident, said he is already worried about paying back the student loans, which he said he'll have to start paying back six months after he graduates. 

"I'm scared of what's going to happen after I graduate," he said. "I consider myself a responsible adult, I have that debt in front of me, so of course I'm going to pay it ... With the interest rates doubling, it's just scary."

Detroit area ministers who also spoke at the news conference said the interest rate issue is not just about the numbers. 

"When you take all of the paperwork out of it, when you take all the bills and the issues away, it becomes a moral issue," said the Rev. Jonathan Combs, pastor of Faith United Methodist Church in Oak Park. He said the higher interest rates will become a burden on families already struggling.

Peters pointed out that Congress recently passed a $22 billion tax cut for Americans who make $1 million or more annually. That would have been more than enough to cover the cost of the maintaining the Stafford loan interest rate, he said. 

However, Republicans on the U.S. Senate Republican Policy Committee blog blame the problem on the Affordable Health Care Act, President Barack Obama and Democrats:

"As Congress works on a solution, it’s important to remember that the White House and Democrats in Congress took over the student loan industry in order to fund part of the President’s expensive health care law. Once again, it’s clear that the President’s law was drafted quickly and without any consideration of economic consequences."

The blog also notes that Republicans are "committed to extending the interest rate reduction for another year and also making it cheaper and easier for the private sector to create jobs for young Americans."

Senate Republicans call the Prevention and Public Health Fund (PPHF), from which they propose covering the lower interest rate, a "slush" fund that has already been cut by $5 billion under the 2012 Middle Class Tax Relief and Job Creation Act. 

R Gibson May 02, 2012 at 03:05 PM
Daryl; Well Said. A lesson I think is lost on a great number of kids today. When everyone gets a trophy and no on keeps score it is a disservice to our kids. As my dad always said, "we always need ditch diggers, too".
RAB May 02, 2012 at 04:40 PM
MMB, Sounds like you want your cake and eat it too. Work hard, get good grades, persevere. Then set yourself apart from the other job candidates, get a job, and pay off YOUR debt without bellyaching about it. We all did it and we lived through it. Quit waiting for the world to give you everything. Entitlement is not a right.
dk May 02, 2012 at 09:41 PM
If ignorance is bliss, you must be one happy camper. "A college degree was once the path to the American Dream. Students were once able to pay their way through college by working part-time. That is no longer feasible as tuition prices have increased by over 800% since 1980. These days, a college degree looks something more like a nightmare as graduates enter the declining workforce saddled with tens of thousands of dollars in student loan debt. Borrowers often face usurious fees that cause their loan balance to balloon to 2-4 times the original amount they borrowed. Millions will be burdened with this debt for the rest of their lives, unable to purchase homes, vehicles, have children, start businesses, and even save for retirement. These are the very things we need people to do in order to pull our economy out of this recession. This bill proposes a 10 year repayment plan at 10% of a borrower's discretionary income and after 120 payments, the remaining balance is forgiven, and not considered taxable income."
dk May 02, 2012 at 09:41 PM
We need to allow students to put these loans into bankruptcy, and teach the lenders a lesson. We don't need more loans or cheaper loans; we need cheaper tuitions. "Michigan families pay more to send their children to state universities than families in almost any other state, according to a Bridge Magazine analysis. Not coincidentally, Michigan also gives less money to its public universities than almost any other state." A decades-long decision to skim money from the state’s 15 public universities means Michigan teens face a higher hurdle to attend college and leave campus with more debt than their peers in other states – both factors that are likely to erode the Michigan’s ability to revitalize a moribund economy. "College costs across the country have doubled in the past decade, according to the Consumer Price Index, partly because of rising health-care and retirement costs of university employees. But the difference in cost between public higher education in Michigan and other states can be traced to one thing: Budget decisions made in the State Capitol. As state support drops, more of the cost of college is shifted to students and their families — a 21st century “college tax.” Snyder, McMillin and the rest of the radical right wing are doing to universities what they are doing to Rochester Schools. They are diverting our tax dollars from our children to their corporate pals.
dk May 02, 2012 at 09:58 PM
Ignore them. You kids are getting screwed by a bunch of hypocrites. They can take our tax dollars for their business and personal gain, just don't give it to our colleges or Rochester Schools.
dk May 02, 2012 at 10:00 PM
Neither are yours.
Amber Somerville May 03, 2012 at 12:08 AM
I can see both sides to this issue (maybe because I was born on the XY cusp?...I don't know) but sometimes our younger generations look like we don't want to work for anything. We can sound like babies to those older than us who feel they worked for all they have and deserve it. Fair enough. Then again, it is no longer possible to do the things they did and get the same pay off in the end. The cost of higher education is ridiculous. The worth of a Bachelors degree is so much lower now, it makes you wonder if its worth the cost sometimes. In July, loans for grad school will no longer be subsidized. I graduated with a masters degree in 2008 and see that the cost of tuition only 4 years later for my same degree has doubled! But woe to those without further education, it seems, as jobs that used to pay a living are being sold to the lowest bidder in the name of economic need. I have my doubts. So yes, the younger generations may appear to be entitled whiners on the surface - especially to those who worked hard and paid their way through. But maybe they should stop and ask themselves if this world is the same one they prospered in not so long ago. Look up today's cost of the degree you hold from your Alma mater. Couple that with the outsourcing of jobs for corporate gain, and it just might make you think twice before telling the youngins to buck up. I'm not saying the answer is to lower interest rates - but I do think some empathy is in order.
Bryce May 03, 2012 at 01:22 AM
@ Oakland... Did you ever consider that a big part of the reason that tuition has increased as much as it has is because of the number of loans being given freely to cover those costs? An endless supply of customers causes prices to go up. I see colleges with spa's, well apportioned gyms (not the athletic type) and other assorted goodies that were no where to be found when I paid my way through.
Daryl Patrishkoff May 03, 2012 at 01:37 AM
Amber, Life is hard sometimes and if you want something bad enough you will find a way to make it work with sacrifice. I paid for both of my daughter's college because I planned for it and made sacrifices, they worked during school and they lived with me to keep expenses down. My last daughter finished a couple of years ago, so it is recent, they have no college debt. Is it fair that people who plan and make personal sacrifices to get through college without debt to pay for others who did not? College tuition rates, fees and books are accelerating at an alarming rate, Why? Look at the wages, benefits and pensions they pay which are much higher than the private sector and the sustainable costs are continually rising. Do you remember the Oakland University professors going on strike in 2009, the same time the auto industry was losing jobs in the tens of thousands, huge pay cuts, benefits evaporating and pensions gone? The professors got their raises and did not see any of the tough times, they kept raising tuition and they complain that they need more money from the taxpayer. When you measure the average graduation rate of a Michigan community college after 3 years for a 2 year degree they are at a 15% graduation rate. When you measure the average graduation rate of a Michigan university after 6 years for a 4 year degree they are at 50%. They do not measure themselves on job placement! I thought that was the idea of a college degree, to get a job!
Marty Rosalik May 03, 2012 at 03:21 AM
Private sector employees have seen drastic reductions in employment, wages, benefits, and pensions. Demanding the same of public sector "just because" others took the hit is wrong. The fact is that the funds provided by taxing the private sector are drying up. This is forcing cuts to public sector if we like it or not. Our economy is driven by the engine of consumption. The skyrocketing increases in energy, food, and now education are forcing more pressure on everyone. ALL of those costs starve the fuel from the consumption engine. As we scale back and "find a way to make it work with sacrifice" , we stop consuming. This race to the bottom will stall that consumption engine. So are there enoug rich people to revive the engine? Sooner or later the consumption reductions of the many will effect the few.
Patricia May 06, 2012 at 03:32 AM
Unfortunate I know students who are now working and looking for every way they can to defer their loans-they don't have initiative -they complain about their lot in life but they have plenty of money for tech gadgets, tons of time for near constant texting, money for beer and "hanging out" with their little group--so they find another window-employers that will reimburse tuition for post grad -so, they slide into a single course, (on line), work full time and the 35K in loans they carry are now deferred because they are "in school" again, still no direction and 2 years to go--they don't change their life. There is always tomorrow, career students. As a taxpayer, I feel suckered. Then on the other hand, I have seen a few responsible young people work there way through college-it took 5 years, not four-but they are debt free, paid for their car and insurance and are making a life without complaints, without all the whining and energy spent trying to figure out how not to pay loans back. So, they are on both sides of the fence. I think the loans should not be so easy to obtain. The interest rate should be comparable to what a taxpayer has to pay for a loan. Any one who cheats and their families who may help facilitate it with incorrect financial information needs to be denied. Free rides need to be replaced with more responsibility by both the student and their parents. Parent should be the primary source of funding their childs education, not taxpayers.
mike smith June 02, 2012 at 05:02 PM
oakland blames everyone else as usual
Ed Lambert June 02, 2012 at 06:34 PM
In a nutshell: The crying about college debt comes from those whose families never saved a dime, always lived on credit. Add to that the fact that the academic culture by its nature believes everyone else is responsible for the bills and sees no reason to curtail its own spending, including salaries. Parents who take the long view and are not into instant gratification do not have major problems regarding college education for their children. All part of the liberal perspective--which will be defended by those with that perspective and in total denial that they have it. Who knew! Gary Peters will do what he can only do: offer more liberal non-solutions to problems requiring a different approach which he is incapable of understanding. Comes with genetic defect.
Daryl Patrishkoff June 03, 2012 at 10:25 AM
Ed, Forward planning is the key to affording a college education. My wife and I are now up to 4 grandkids, their parents have already opened up college savings accounts that we all contribute to at Christmas and Birthdays as part of their gift. It is small dollars today, but over the years these dollars and interest add up to a lot of money if we all maintain this practice. Just because others do not plan and make sacrifices does not mean they get a free ride. Whether you are rich or poor, forward planning and sacrifice will get you what you desire in the future. The colleges are not fiscally responsible and have built an unsustainable model that just keeps increasing their price to feed the monster. They have not seen the hard times the public sector has seen in this recent recession in 2008 and feel they are above any cuts. Government is not the answer; look around, everything they touch is mismanaged because they make political based decisions, not logical ones.
dk June 03, 2012 at 10:53 AM
The problem is that student loans cannot be defaulted on, and our tax dollars guarantee the banks and schools their money no matter how many bad loans they make to people who can't afford to pay. If the schools and banks were not held harmless, they wouldn't hand out thousands of dollars to people beyond their ability to pay. With less people applying, it would increase competition among the schools (the right wing holy grail) and prices would come down.
dk June 03, 2012 at 11:41 AM
Darryl, 1. Not everyone has parents or grandparents that can afford to help them. 2. With four grandkids, college will cost $400K at a min. - if they just go to MSU or UofM. That's a gift of 2,000 a month each month, each year, for 18 years. Some people don't even earn $24,000 a year let alone can afford to "gift" that kind of money. 3. Your "tough" attitude is exactly what I have against conservatives. You don't give a hoot about anyone but yourselves, and you never miss an opportunity to tell everyone what "good christians" you are. Because you have money, you don't care about leveling the playing field for anyone who doesn't. As long as you get the tax breaks and reap the benefits of corporate welfare, you actually have the arrogance to preach at the "losers", who according to you, deserve whatever fate happens to befall them in life because they did not "forward plan". 4. Last but not least, Google/LinkedIn says you own a private vocational school and that you work for CMU. Apparently you make your living off of student loans and our tax dollar. As a private school, I would be willing to bet you got your share of public job training funds in 2009/2010 during the Granholm administration . When YOU get our tax dollars, it is capitalism. When students get our tax dollars, it is welfare and socialism. Typical right winger.
Daryl Patrishkoff June 03, 2012 at 01:20 PM
Oakland, There you go again, making acquisitions without any facts. You hide behind a false name and throw angry insults at people without any substance, you are meaningless noise. For the record, I put myself through college while working full time and obtained my BS and Master degrees without any student debt. I did what I could afford, not take on some debt I tried to get someone else to pay for. This was possible in my day, it is possible now, it is called hard work. You seem to have this belief that there is a money tree, you are a victim and must take from others to get your fair share. Join the rest of the real world and work for it and make your own way. Regarding my vocational school, you know nothing about our business but decided to attack it and call it bad and jump to conclusions. You have no idea of what you are talking about. Like I have said in the past year, come out of hiding and let's have an intelligent conversation.
dk June 03, 2012 at 02:14 PM
Way to go Darryl. When all else fails, change the subject.
dk June 03, 2012 at 02:21 PM
BTW, Mike Smith. You and your tea party pals are the ones blaming everyone but yourselves. You're the one saying they can't pay their student loans because they are : lazy, stupid, didn't plan, picked the wrong major - everything except you Republicans (and many Democrats) want to free load off the largess of the country and make everybody else pay your share. BTW Darryl - welcome to 2012. When you were a kid, Republicans weren't insane and all of the wealth hadn't been stolen from the middle class and redistributed to the top. You prove what I said about conservatives living in a bubble and out of touch with today's realities.
tecjK June 03, 2012 at 03:45 PM
Right on
Ed Lambert June 03, 2012 at 04:16 PM
Oakland, I suggest that it is the liberal bubble that is about to burst. Are you taking note of primary and recall elections around the country? Do you remember the national vote in 2010? How about the last vote in Troy? What do you fear from the tea party? I wonder if you have that same fear of very popular talk radio hosts and of the most popular cable news channel? Give it your best. Humor is always welcome.
Ed Lambert June 03, 2012 at 04:29 PM
The major problem regarding student loans and the federal government is that "adults" today will not defer gratification in order to assist their children later on with college costs. Part of that problem, accordingly, has been a liberal Congress (libs on both sides of the aisle) abetting all this lack of self discipline in order to secure for itself a career in DC. Question: Can anyone name a time when a Congressional committee decided to investigate seriously the precipitous rise in college costs? The Dems own the Senate, which has an ed. comm. Any "investigation there? Of course not! Why would Dems bite the hands that feed them yearly with new grads from the liberal bastions. But they try to go after Hillsdale College and can get nowhere because Hillsdale accepts absolutely no federal money. Kind of telling, no?
John David June 03, 2012 at 05:03 PM
This is just an anecdote not proof that this practice is widespread, but last night on Suzy Orman, she interviewed and advised a young woman who racked up some $40,000 or more in student debt, admitting she used a lot of it for person travel to a variety of places around the world, not for college costs. That is possible to do and she's probably not the only one doing this.
Daryl Bulltrishkoff June 03, 2012 at 09:19 PM
I think Chrysler was a good ACCUSATION for Fiat. Please visit my awesome website. Center for making $ off the car companies when they were ran by nimrods.
Daryl Patrishkoff June 03, 2012 at 11:36 PM
I like Daryl's new name! Pretty funny stuff. Grow up Oakland and come out of hiding, we have seen you under many false names on this site in the past. It is the same meaningless noise.
mike smith July 10, 2012 at 01:42 AM
I agree Oakland has had many names, but cant fool anyone with his style of English and ignorance and hatred
Larry Smith July 24, 2012 at 07:43 PM
I have noticed the Oakland has not responded to us, Daryl, probably Oakland went on the very Dark Side, or he changed his name
Daryl Patrishkoff July 25, 2012 at 01:30 PM
Larry, The fact is Oakland is a scared person that thinks he/she is a victim. I feel sorry for Oakland, people have the power within themselves to thrive, all they have to do is tap into it and work hard. They will have failures, but those are lessons and necessary steps to success.
Teena Reed November 09, 2012 at 12:36 PM
I also think that the interest rate of this student loan must be reduced. That’s true that Congressman Gary Peters estimates 7.4 million college students across the nation, 330,000 of them in Michigan, will be hit with about $1,000 in additional interest for each year they attend school if the Stafford loan rate moves from 3.4 percent to 6.8 percent on July 1. http://www.paydayau.com.au
devinbutler30 November 10, 2012 at 10:29 AM
I also think that the interest rate of this student loan must be reduced. That’s true that Congressman Gary Peters estimates 7.4 million college students across the nation, 330,000 of them in Michigan, will be hit with about $1,000 in additional interest for each year they attend school if the Stafford loan rate moves from 3.4 percent to 6.8 percent on July 1. http://www.paydaydirect.co.uk

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »