Student borrowers shouldn’t have to pay 3.4 percent interest rates on government-issued student loans, when currently, federal funds pay 0.75 percent.
Although credit card debt has wavered up and down for the past couple of years, student loan debt has increased by 70 percent between 2004 and 2012. And while all federal student loans come with terms that protect the borrower from economic devastation, repayment is difficult.
The average college debt has grown from “$9,188 in 1993 to $35,200 now,” and while it is true that most students generally do not need to make payment while they are in school, a loan that is outstanding for a period of time will likely go up. For example, let’s say you have an outstanding loan for $5,000. After a period of time, let’s say four years, you’d owe $6,558 because of accrue interest. This type of loan is called unsubsidized–when federal loans accrue interest at a set fixed rate.
Currently, the total amount of outstanding student loans is $1 trillion, compared to the roughly $13.5 trillion in outstanding mortgage debt. We ask you, is this another taxpayer bailout of the student loan industry?
- Have an official need as determined by the FAFSA
- And be an undergraduate student, because as of July 1, 2012, graduate students do not qualify. subsidized loans