By CHRISTINA MATOUK, Guest Writer
On July 1, the national rate on student loans is set to double from the current rate of 3.4%, to a new rate at 6.8%. The new rise in the rate is controversial because the current rate of 3,4% is already above market value.
“This is the reason why I’ve had to avoid student loans for the most part since I got to college,” says University of Michigan-Dearborn Junior Michael Palazzolo. “It would be pointless for me to get student loans if it costs me more later to pay them off. I’d rather work through school or have a family member spot me with an opportunity to pay them back later.” Palazzolo reiterated.
According to the New York Times, student advocacy groups in Washington issued a brief saying that the federal government should not be profiting off of student loans In the brief, it states that government takes 36 cents out of every student loan dollar it receives. A number that will grow higher with the new rates. The government expects to bring in $34 billion dollars next year, according to the Times.
Rima Saad is a UM-D senior that is also on the student side of the argument.
“I understand the crisis the government is currently facing financially, but the students that are the future of this country should not be where to turn when in comes to paying off some of the current debt.” Saad states.
The average student that uses student loans graduates with $27,000 worth of student loan debt.
President Obama ran his 2012 election campaign with his sights on finding a way to lower the debt. In an interview with MTV, he talks about how he had to use student loans to get through law school, and the First Lady had to use them as well.
Although there is an agreement that the rate should not double in July, there is currently no solution to prevent it.