U.S. Rep. Ron Kind, joined by university faculty and student leaders, today held a roundtable discussion on the University of Wisconsin La Crosse campus to address the rising cost of education including the potential federal student loan interest rate hike on July 1.
"If interest rates for students double to 6.8 percent on July 1, more than 163,000 student borrowers across Wisconsin will see their debt load increase," said Rep. Kind. "Instead of building more hurdles for young people to get the education and skills they need to succeed, Congress needs to take immediate steps to keep students in the classroom and interest rates low."
Tuition rates at four-year colleges and universities have risen over 32 percent in the last decade, piling our young adults high with student debt. In fact, two-thirds of the Class of 2010 graduated with loan debt and student loan debt now exceeds credit card debt in the United States.
"Anyone with the skills and determination to attain a higher education should have the opportunity to do so, especially in a 21st century economy in which a growing number of jobs require a degree. These young adults not only better themselves but can provide for their families and strengthen our economy," said Kind.
If Congress does not act on the interest rate hike, interest rates on subsidized Stafford student loans -- one of the few affordable programs for students and families -- will double, from 3.4 percent to 6.8 percent on July 1. This will increase costs for more than 7 million students in the 2012-13 academic year. Without action, next year a student borrower will pay $1,000 in additional repayment costs and $1,000 each year Congress does not act while the student is in school.
According to the 2010-11 University of Wisconsin System Fact Book
* There are 1,004 student loan recipients at UWL
* 71 percent of UWL graduates have loan debt
* Average debt of UWL borrowers is $23,411
* In the entire UW system, 71 percent of resident undergraduates had loan debt at graduation, with the average loan debt being $25,397
In addition, the current budget proposal, the Ryan Budget, which has passed the House of Representatives but not the Senate, decimates student financial aid. Not only does it allow for the interest rates on subsidized Stafford loads to double from 3.4 percent to 6.8 percent on July 1st, but it significantly reduces federal Pell grants.
* Eliminates all mandatory funding for Pell grants
* Eliminates Pell grant eligibility for less-than-half-time students, which significantly impacts students in the technical college system
* Eliminates the scheduled Pell grant increases which were included in the Student Aid and Fiscal Responsibility Act of 2010 (from $5,550 in 12-13 to $5,645 in 13-14 and to $5,725 in 14-15)
The Ryan Budget also reduces the size of student work-study programs by 19 percent, potentially impacting 3,000 students in Wisconsin, and cuts TRIO funding by $159.6 million.