Lower college loan rates may be restored

A bipartisan group of senators is announcing a deal that lets students dodge higher interest rates when they go back to campus this fall.
AP Wire
Jul 18, 2013

The group on Thursday told reporters they have reached a compromise that lowers the rates for all students who borrow from the federal government. The rates would be linked to financial markets, meaning interest rates would climb in coming years.

Democrats insisted on and won a cap on how rates could climb.

Democratic Sen. Dick Durbin of Illinois says the bill does not give any negotiator everything he sought. But it provides relief for students who were facing interest rates that doubled to 6.8 percent on new loans.

The House has already passed similar legislation and the differences could be resolved before students return to campus.

 

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Comments

truthhurts

i think they should keep the rate high, kids need to work to pay that back as soon as possible, like before they buy a house. If you don't like the rate, save your pennies and pay for it as you go. Not everyone deserves a chance. I would guess a 1/4 of these kids flunk out and work flipping burgers...like they are going to pay it back. NO MORE HAND OUTS!

Mystic Michael

On the contrary, everyone DOES deserve a chance. That's what America is all about: opportunity & liberty. It is what makes America great.

The reality is that not every person who seeks a good education has the good fortune to have been born into a family of means. The fact that we don't marginalize those people; that we as a people refuse to neglect the potential of someone who seeks to make more of himself/herself - simply because that person doesn't have a lot of money - is something that ultimately ennobles & benefits ALL of us.

Because ultimately we are all interconnected & interdependent - despite there being those among us who cannot comprehend it or accept it. Because a well-educated nation is a healthy nation. It is a creative nation. It is a productive nation. And by simple virtue of our collective membership and participation in it, we are ALL the better off for it.

truthhurts

during my college days, i saw a lot of people blow some of the best opportunities. For example, students that had a trust fund and didn't have to WORK to go to college 9 times out of 10 blew the money and had nothing to show for it in the end. Where as, kids that had to earn their way through college ended up succeeding and became better people becuase they had to earn it. So that is the reason why I say not everyone deserves a chance. Let me re-phrase that, everyone that is willing to earn the opportunity deserves the opportunity. But in the America that I see (as of lately) there is no drive, kids want easy street...and that teaches them nothing and is doing a diservice to them in the long run. Hence, the government giving money away like it is going out of style to kids that will never be able to pay it back. High schools need to push more trade job education, sometimes that is a high earning field than some college degrees will get you. Also, a college education is not what it was 20 years ago. I don't understand why parents push it so hard.

Lanivan

You are right in that there will always be some college students who goof off and fritter away the opportunity and privilege of a college degree.

Not everyone is college material. Many students would be more successful and better suited for technical training or certification. With very few exceptions, some sort of advanced degree or specific training is the only way for many people to dig out from a tradition of poverty. To make that realization difficult with a huge debt load is immoral and short-sighted.

I disagree with your perception that kids want easy street. Yes - it's true things are very different today than when we were in college, but our parents said the same about us, I'm sure. I see a very strong, committed work ethic, and I am terribly impressed with the work ideals, enthusiasm, and creative and entrepeneurial spark in many young people I happen to know.

Vladtheimp

I was so excited by our agreement, I neglected to use "Reply" and instead just posted a new comment. In recognition of the new state of things, and your love of music, I offer: http://youtu.be/VUSC37bLuuU

Lanivan

If you set out to be irritating, you have failed miserably. Love this old tune (so smooth), new to me, and it is already downloaded to my Ipod. Thanks for the gallant gift of musical detente, however short-lived it may be.

Lanivan

What makes America great is the salience of citizenship, of the recognition of our responsibilities to each other, of the belief that we define ourselves first and foremost as citizens before consumers or taxpayers. America is a nation of entrepeneurial spirit and a social contract that creates a connection between a person and a nation.

The right to health care and education are two basic ways a nation can honor the social contract, and insure human rights and social progress. They are both moral challenges, and the key to healthy capitalism.

Vladtheimp

I'm so pleased to agree with you about America and citizenship, about responsibilities to each other, about how we define ourselves. I agree that we owe nothing to non-citizens, even though through our beneficence we provide many costly services to them. We certainly don't owe them citizenship when they have broken our laws, and don't define themselves as Americans and increasingly don't work to assimilate themselves as did prior immigrants, both legal and illegal. Hooray - a detente.

BUT, there is no "right" to health care and education, unless the Constitution is amended to include them. They are benefits of citizenship that the nation has decided to grant to its people (which the United States has done admirably, through its public education system, Medicaid, and the laws mandating emergency medical care for those who need it.

The key to healthy capitalism is capitalism, not what statists are pushing us to.

Mystic Michael

I'm fine with conceding that there is no Constitutional requirement for provision of healthcare & education. Because we as a nation have collectively committed to doing many things in support of the public good that are not referred to in the Constitution. And because the Constitution was intended for other purposes anyway.

As for capitalism, it has its place. But capitalism has never been that super fantastic about serving the public interest. It has seldom even taken a serious interest in serving the public interest. For the purposes of this discussion, we could consider it to be of marginal relevance - at best.

Lanivan

Vlad and MM - Education and health care are indeed the key, in fact the cornerstone, of healthy capitalism. They are both integral components necessary for capitalism to thrive. As a small business owner, nothing is more important to me than an educated and healthy workforce and consumer base. As a citizen employing other citizens, it is my moral duty to honor the social contract and take the responsibility of offering health care and training. It is also the most efficient way to attain maximum productivity and profits.

Using my own experience as an example, the fact that I had access to a good education and health care helped give me the energy, stamina, knowledge, and wherewithal to attain my (modest) entrepreneurial success.

Education and health care might not be rights explicit in the Constitution, but surely you could agree they fall under the right to life, liberty and the pursuit of happiness.

Mystic Michael

Well stated. Hear, hear...

Wingmaster

Have I got this straight Lan, you fight for a change of our 2nd amendment, a constitutional guaranteed right, and support socialist change of our healthcare as though it is a right?

Note all amendments place power and control in the hands of the people, where as Obamacare places control with government.

Prusuit of life, liberty, happiness. ..is not a guarantee that you have someone or some government provide for you!

Lanivan

No - you have it all crooked. I, along with 98% of the citizenry, do not think tighter background checks has anything whatsoever to do with "changes" to the 2nd.

My argument is the symbiotic nature of a healthy capitalistic system and healthy, educated citizens. Government may provide public education and, now, assist with free market health care options, but I view this as honoring the social contract between government, society, and capitalism.

truthhurts

have you ever bought a gun? They do background checks on every person that buys one...how can you improve upon that?

sun and shine

Student and parents need to take some responsibility with borrowing and then the interest rate will not affect as many individuals. I know we are steering our daughter to community college for the first two years which is very affordable for most if they are willing to work part time during the school year and full time during the summer. After those two years, we will have to see how she can achieve her goal with as little debt as possible at the end. And should she have to take on debt, she'll be encouraged to live at home for 1-2 years and pay the entire loan off as fast as possible so the interest rate will not be that much of a factor. I understand the scenario is not that easy for everyone but for most of the incoming freshman at major universities this fall, it could apply to a large percentage. I know as a parent first hand that my daughter is not half as excited about going to community college this fall as she would be if she was heading off to State but I am hoping that in 4-5 years, she'll be thanking us for our guidance. There are choices you can make so you don't have to borrow, or borrow much less and in return, the interest rate won't have such a drastic affect.

Lanivan

We, here in West Michigan, have many excellent options for continuing education that, unfortunately, many communities don't have. And many students are pursuing various degrees of study that are not covered at community colleges. One of the bright spots is the surge in online college courses that helps keep costs down.

College costs are still a huge problem, and even with parents/students taking on the responsibility of planning, paying for, and executing their education as wisely and efficiently as possible, it's very difficult to avoid some student loan debt.

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