The cost of attending college has rapidly increased over the past 30 years. Since 1982, tuition has increased by 530 percent.
As an undergraduate student, I have seen tuition at my shamefully-expensive private school steadily increase over the last four years while my financial aid has dwindled. I depend on scholarships, financial aid and student loans to pay tuition, so the possibility of my interest rate doubling on July 1 is terrifying.
While both Democrats and Republicans have agreed that interest rates should not double to nearly 7 percent this year, the Senate is at a standoff on how to fund the $6 billion cost of a one-year freeze. Still, in a controversial move on May 16, Senate Republicans voted overwhelmingly for two GOP-written budgets that would allow student loan interest rates to double.
Republicans are voting to increase student loan interest rates despite the fact that the average student graduates with $26,000 of debt; and Latinos are more likely to graduate with larger debts than the average student.
In 2011, 43 states cut funding to higher education institutions – including grant money for students – which decreases the overall value of financial aid.
Debt becomes more and more of an obstacle as students pursue higher education. A new report by the Center for Urban Education says that reducing undergraduate debt is a key factor in increasing the number of Latino students who pursue graduate degrees in science, technology, engineering or mathematics – arguably the world’s most necessary professions.
If we hope to reduce tuition costs and make higher education more affordable for young Latinos, keeping student loan interest rates where they are at is a good start, but there are other necessary reforms that are long overdue. We must also eliminate the predatory practices of lending agencies – agencies like Sallie Mae.
In 2007, Sallie Mae was designated as the official student loan partner of the Hispanic Heritage Foundation despite having made hugely excessive profits off of the student debt of hundreds of thousands of Latino youth. True, student loans put a college education within the reach of many who may not otherwise have had an opportunity to pursue a higher education, but lending agencies also profit largely from late fees and other penalties on those very same loans.
Sallie Mae also lobbied aggressively in an unsuccessful attempt to prevent the Obama administration from reforming the student loan system. The reforms effectively eliminated billions of dollars in wasteful middleman fees and put the money toward student aid instead.
Currently, only about half of all Latinos that begin a college education will finish and graduate, but all are likely to come away with debt. If financial stability is going to continue to be a determining factor for pursuing a college education, the least we could do is not charge more money to those already borrowing money for their education.
As for me, I’m ending my fourth year knee-deep in student loan debt – unable to register for my final credit requirements because of past-due tuition – while preparing to enter a struggling business market. While I don’t believe money should ever be an excuse for not pursuing an education, it is certainly one of the most difficult (and oppressive) obstacles to overcome.