Student groups, college reps criticize House measure
JENNI DILLON Star-Tribune staff writer | Posted: Wednesday, August 31, 2005 12:00 am
Making educational loans more expensive would only hurt college and university students, a Casper College official said.
"Loans are a significant part of our students' financial aid packages," said Darry Voigt, director of financial aid at Casper College. "If there's something out there that's going to increase interest rates, that would impact our students."
Voigt's comments came in response to news that student groups nationwide are protesting federal legislation they say would increase the cost of education loans. House Resolution 609, the reauthorization of the Higher Education Act of 1965, includes provisions that would force students to pay a 1 percent guarantee fee on the principal of a loan, a tab many lenders now pick up for students. It also would raise the interest rate cap for federal student loans, increase interest rates on consolidated loans by a percentage point and add an origination fee to consolidated fixed-rate loans, said the student groups.
"(The bill) cuts nearly $9 billion from the student loan program, which would be the biggest ever cut to federal student aid programs," said Kate Rube, an advocate with the State Public Interest Research Groups' Higher Education Program, one of several organizations protesting the bill. "Far too many students are already struggling to afford higher education, including many who go deep into debt."
HR 609 is scheduled to go before the full House of Representatives this fall. In the meantime, the Senate Health, Education, Labor and Pensions Committee is expected to release its own reauthorization bill as early as next week.
A representative of the Senate committee's chairman, U.S. Sen. Mike Enzi, R-Wyo., said the draft of the Senate bill will seek to balance a White House directive to cut the federal budget while still making college affordable for students.
Most research agrees that the average student who takes out a loan for college now graduates with about $18,000 of debt. According to the University of Wyoming's financial aid office, average debt after four years at UW totals about $15,000. And even at Wyoming community colleges, debt levels hover around $10,000.
"Loans make up 60 to 70 percent of all financial aid available," said Dave Gruen, director of student financial aid at UW. "With the rising cost of education, families are taking more advantage of what's available in student loans."
That debt can have long-term impact on graduating students, though, Voigt said.
"Students are optimists, so they borrow, thinking, 'When I get done, I'm going to get the best-paying job in the world and pay it off, no problem.' Then they think back and wish they didn't borrow as much. Even though the payments are reasonable, they seem to be there forever," he said. "It's a lot easier to start out with a clean slate and not have a big debt burden when you have a new job."
That's the point several student groups, including the United States Student Association, National Education Association Student Program and National Association of Medical Students, are attempting to make.
"As the costs of paying student loans increase, people may be discouraged from choosing some vital professions altogether," said Mandy Plucker, chairwoman of the National Education Association's Student Program. "A college student who wants to become a teacher may think twice when she realizes that a teacher's average monthly salary is not enough to cover her student loan payment."
Staff writer Jenni Dillon can be reached at (307) 266-0619 or Jenni.Dillon@casperstartribune.net.