With the interest rates on student loans for the neediest students set to double from 3.4 percent to 6.8 percent on July 1, 2012 if Congress does not act, the Rhode Island Student Loan Authority (RISLA) sent a message today about the damage that this increase would cause and the importance of maintaining the current rate, while providing for key student loan forgiveness programs.
Joined by students who would be impacted by the rate hike as well as long-time college affordability advocate Congressman Jim Langevin, RISLA Executive Director Charles Kelley spoke out about the urgency of the situation at a news conference at the organization's College Planning Center at the Warwick Mall. Four proposals have been recently released to prevent the increase, but none are currently expected to pass in both chambers of Congress.
"There have already been several cutbacks to federal student aid programs this year, including changes to Pell eligibility and the discontinuation of the subsidized Stafford loan program for graduate students," said Charles Kelley, Executive Director of RISLA. "Students and families are having a harder time justifying the cost of an education, and if these rate hikes occur, some students may just decide not to pursue a college education. We can't let that happen."
In addition to speaking out about the consequences of federal inaction, participants stressed the need to support and build on student loan forgiveness programs like RISLA's Nursing Rewards Program. Nurses who have benefited from the initiative spoke about how the initiative has helped them.
"Need-based federal student aid programs have leveled the playing field for so many students, yet college costs are becoming even more burdensome. It is imperative that Congress prevents student loans from doubling for over 7 million college students across the country, which would add an average of $1,000 to the life of a student's loan," said Langevin, who noted that according to a 2010 report by the Project on Student Debt, seniors graduating from a four year institution had an average debt of $25,250. The average Rhode Island student has over $26,000 in debt.
"We must recognize, as Charlie and his organization know so well, that college affordability efforts must address ways to help students deal with the debt they are already accumulating, even with the Stafford rate at 3.4 percent," added Langevin. "That's why, in addition to fighting for the 3.4 percent interest rate, I have been supportive of RISLA's loan forgiveness program for nurses as a model for filling a workforce need and giving graduates a fair economic opportunity."
Rhode Island Student Loan Authority (RISLA) is a non-profit state authority that has been helping families pay for college since 1981. To help families meet higher education costs, RISLA offers the Rhode Island Family Education Loan, a state-based college loan program that offers low fixed interest rates and zero origination fee options. RISLA gives back to the community by providing free college planning and financial aid counseling through its College Planning Center of Rhode Island and by offering free financial literacy sessions at colleges and organizations statewide. RISLA also offers loan rewards programs to students pursuing careers in high need fields. For more information on RISLA or to apply for a Rhode Island Family Education Loan, please visit risla.com.