Lowering Student Loan Interest Rates Won't Make Higher Education More Affordable

barack obama

The cost of higher education in this country is more than alarming. As someone who graduated with more than $70,000.00 in student loans for my out-of-state tuition, I sometimes want to slap myself silly for borrowing so much money.

When I was in college in the 90s, I borrowed tens of thousands of dollars each year despite having no credit history. Getting my loan money each semester was easier than opening a credit card with Macy’s.  I couldn't buy a pair of shoes on credit but I was able to borrow an almost unlimited amount of money with no idea or plan in place as to how I would pay it back four years later.  

Fifteen years later, I now understand that something is fundamentally wrong with a system that allows a student to accumulate so much debt by the age of 22. Most student loan borrowers have never had a chance to earn an income or manage debt and a budget, yet the total number of student loans outstanding in the U.S. is $750 billion dollars. With our economy failing in so many different other areas, almost 70% of lenders anticipate that student borrows will be delinquent in their payments. While some of these students may “bank” on filing bankruptcy, they will be disappointed to find out that neither federal or private student loans are discharge-able in bankruptcy unless a student demonstrates extraordinary circumstances.  

The solution is not to just to lower loan rates, instead we need to make higher education in this country affordable. Until college and graduate programs are more affordable, we must be able to provide American students with other ways to pay for college.  Enacting laws that change the way students borrow money and how that money will be paid back must be part of the solution. We also need to provide our students with more resources to avoid borrowing money. 

Currently there is hope for mothers like myself worried about how she will pay for college for three children. President Obama has doubled his investment in scholarships and financial aid so that students from working- and middle-class families can have access to higher education without the fear of owing so much upon graduation. This new law give me peace of mind. I have invested so much time and resources to give my children the best education possible during their kindergarten through high school years. My goal is to have my children qualify for academic scholarships so that after college, they are focused on finding or starting their new jobs rather than worrying about how they will pay back an impossible debt.  If my children do not qualify or receive scholarships, President Obama has also enacted law that makes it easier for students to pay back their federal college loans. These changes demonstrate a commitment by our current administration to ensure that higher education is still a feasible option for American students and families like mine.  

 This post is part of a weekly conversation with our Moms Matter 2012 political bloggers. To see the original question and what the other writers have to say, read What Do You Think About the Student Loan Interest Rate?

Image via BarackObama.com 

2012 election, education


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Reali... RealityCheckNow

There are already programs in place - you can join the military, reserves or Peace Corps and they will pay for all or part of your education.  What is taking place in this generation is that people think they should be able to just do what they want, with no plan or ability to pay for their decisions and when they fall flat on their faces, everyone else should bail them out.  I graduated with moderate debt with a degree in history.  It was foolish on my part to not either go to grad school so I could teach at the college level or to get a teachers degree so that I  could teach in the public schools so I have a degree which does nothing for me and I take full responsiblity.  I pay my loan back, no one else should (Btw, the job I got after graduation did not require a college degree so truly, I mean it when I say that no one else should be responsible for my lack of forethought.  I learned a painful lesson but I learned it!)

nonmember avatar Nicole

I totally agree with the first poster. I was brought up thinking only poor people went into the military for college, and now I would've gladly gone. I was also great at science and math but decided to get an English degree which did nothing for me. Thankfully my parents are rich, so I only came out with 3 grand in debt. But seriously, everyone is too dumb for college. You don't know what you're putting yourself into at such a young age, just that you outta do it. I would've done it so much differently now at 27. I would go back but I have kids and don't want to go into debt.


I think if you can't afford college and know you can't pay the money back, you shouldn't go. If you buy a car and a few years later can't pay for it, who do you think should pay for it for you? An education is something you buy and if you can't afford it, you can't afford it. College also doesn't just sneak up on you. There is something called working hard and saving and earning scholarships. This isn't like being hungry. College isn't a right. It's a privilege.

jalaz77 jalaz77

Some of you are missing the point. There are people who want to go to college, have no money or family to help guide them, so these kids rack up all this student loan debt, go to financial professionals who say ok here you go instead of sitting down with a plan of how much money to borrow is reasonable and how to pay it back without being so in debt that going to school was a mistake. Sadly high school does not teach you this, it is taught at home, which can be scary for those kids who have parents that do not communicate or care, thankfully I had awesome parents. Going to the military is not something everyone wants to do, how do you think most kids end up in the military? Here is all this money IF we can have you, if it weren't this way there would be a draft. I respect our military personnel dearly, btw. Joining the peace core sounds amazing but it is not always safe going to 3rd world countries to help others when you are not always protected yourself. These are things that crossed my mind when I decided to go back to school again. I have student loan debt but am still able to live and when I go back to school again I WILL pay for it out of pocket because my hubby and I have great paying jobs to do that . 

jalaz77 jalaz77



What needs to be looked at is what will you major in, what income will that bring, is there jobs in that major and what can a person pay out of pocket with reasonable loans. My kids will pay their way but we will be there if they need help and to make sure they are not paying out their asses in loans. Also go to an accredited tech school to help keep costs down then transfer to a 4 year IN STATE school, unless you are getting a free ride. This topic can be irritating...

dinc dinc

There will always be people who do now look at the whole picture when doing anything.  No one should borrow tens of thousands of dollars unless they are majoring in something where the income will support the payback.  If you can't figure that out before you go to college, maybe you aren't smart enough to go.  No one should major in anything without thinking of what they will be doing when they get out.  It doesn't take a genius to figure that out but I see so many people still paying to major in things that can have no viable job at the other end.  Use you head before you borrow.  This is not rocket science.

dinc dinc

And another thing, not everyone should go to college.  Many students simply aren't good enough students to go and compete with those who are but we have the mentality that is a right for everyone to go to a higher learning institution.  It is a privilege for those who worked hard and did well in school up to that point.  Those who blew off school and barely made it through have no business going on unless they can really pull off a miracle.  College isn't  for everyone.  Never has been.

nonmember avatar NY anon

College has always been something people have to pay for, this isn't new. The assumption is you'll get a job based on the earned degree, allowing you to earn a salary, some of which is used to pay back the loan on the education that enabled you to get the job.

Simple ways to reduce college debt:

- don't go to a very expensive private school unless a majority of the funds are already available

- start at a community college, knock out the liberal arts classes that are required but useless - or earn an associates degree, then transfer to the more expensive school. Instant savings on class cost

- work while going to school, even part-time will offset books

- apply for scholarships, grants, etc. it's free money

- goto an in-state school, it's cheaper

Entitlement is the real issue here, not finding ways to attend college without overextending.

Venae Venae

It's called community college, people! 

Or you get scholarships - which is what my daughter did - we had no money to send her to college, so she busted her ass in high school and was rewarded for the hard work.  She also goes to a university in our town and is living at home her senior year.

And finally - my plumber friend earns more than every one of my college educated friends.  People will pay $100 an hour to have their toilet unstopped at 8:00 p.m. but won't pay $100 an hour to hear some dude lecture.

A degree is a degree - whether it comes from Harvard or University of Podunkville.


nonmember avatar Meri

The problem is not with federal aid its with the price of college, room and board, and books. Tuition rates have gone unreasonably high. They outpace inflation by more than double the rate. Are students getting more? No, but colleges are getting rich. Many state colleges require students to live on campus and charge $10,000 for eight months of room and board. (Remember this is for sharing a room with 2 or 3 other people!) College is a lucrative business now- that's the real problem!

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