Student loans deal passed by Senate
WASHINGTON (WJLA) - At a total of $1 trillion, student loan debt is now greater than Americans’ collective credit card debt, and while Congress is finally taking action to address student loans, many students question if the legislation goes far enough.
On any given college campus, 60-percent of the students are borrowing money to pay for school.
“My parents got loans and I have loans,” says Jasmine Brown, who attends Howard University. “I think I’ll definitely be worried about it once I graduate, but right now, no.”
But some students can’t help worry about student loan debt.
“I have about $80,000, right around $80,000,” says Megan Landry, a student at George Washington University.
Collectively, students have racked up over $1 trillion in outstanding debt. The Senate overwhelmingly passed a measure, rolling back the interest rate on loans after July 1 from 6.8 percent to 3.86 percent, but that rate would rise as the economy improves.
Sen. Ben Cardin (D-Md.) was one of the few senators to vote against the measure.
“I disagree with the premise,” Cardin says. “The premise is the student should pay a rate where the government makes money. I think we should be subsidizing our students. The cost of education is too high and I don’t think we should make it higher.”
Interest rates would be capped at 8.25 percent for undergraduates and 9.5 percent for graduate students, more than double the current sub 4 percent rates, making Congress’ move a short-term fix that may turn into a long-term problem for more students like Landry, who is already paying a higher interest rate on her student loan than her home loan.
“What do I do?” she asks. “Do I take out a second mortgage on my house? Pay off my student loans just because I can get a lower interest on that? It’s completely ridiculous.”
Some economists believe if the economy continues its upward trend we could reach those maximum rates by the end of this decade. The House is expected to pass the bill early next week.