Student Loan Interest Rate Problems

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Student Loan Interest Rate Problems
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• If the interest rate, on these loans stays at
  6.8, the increase in revenue after ten years
  would net in 184 billion dollars. So basically
  according to press releases, Congress failed to
  come up with a new plan and missed their July 1st
  deadline. Congress came up with a plan
  previously however it failed to address an
  expense of 6 billion dollars and the president
  voted it.

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• Looking at the current student debt figures, the
  average student loan debt is at 27K and with
  latest calculations there are 7 million new
  students, and many of them would be affected by
  this increase in interest. Totaling up the amount
  that will be charged to the loan based on the new
  interest rate, an increase of about 5,000
  dollars would be experienced to each student who
  is awarded these loans.

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• There were several factors involved that caused
  this deadline to be missed, one of which included
  the President. A few months ago President Obama
  vetoed the Bill freezing the interest rates at
  3.8 for the next two years. After vetoing the
  Bill, Obama stated that the Education Loan
  Interest rate would have gone to 6.8 after two
  years anyways, and that the President wants to
  see a longer term solution be put in place. With
  the previous Bill passed by a Republican
  majority, the Democrats hadn't been Seeing Eye to
  eye with them, and the Democratic side of the
  house was looking for a longer term solution as
  well.

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• Luckily for all of us American People, the
  President is a Democrat, sharing the same views
  as the democrats in congress, who unfortunately
  didn't have enough weight to cause any influence
  on this previously passed bill. So the president
  simply vetoed this Bill passed by congress and
  forced them to come up with another plan.
  Interestingly enough had this Bill been passed by
  congress as well as the president, the cost
  associated to freezing the interest rate at 3.8
  would have been around 50 billion dollars.

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• Throughout the congressional session that was
  held on July 24th, here are some of the facts
  that were used in support of their new plan. One
  senator mentioned that some of the schools have
  tuition costs upwards of 60K per year to attend,
  and that many of these schools charging these
  high tuitions have extremely high drop-out/
  failure rates. He went on to say that these high
  costing schools increase the US education debt
  frivolously. Unfortunately the current US
  education debt is at 1 trillion dollars,
  climbing by 113 billion dollars this year, and
  that this figure is roughly about 53k per person
  in the US.

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• Now in these post-recession times, the
  unemployment rate for young adults aged 20-24 are
  at 14. This high unemployment rate has an
  influence on people wanting to return back to
  school since they cannot find enough jobs and the
  jobs that they can find have reduced wages or in
  a not profitable career field. Some people even
  continue attending school after they graduate due
  to the situation with our American economy.
  Altogether this congressional session was about
  3.5 hours long and gave many grueling details
  about the effects of higher interest rates on the
  American people and what influences this has on
  the education debt.

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• Having higher interest rates effects the American
  population in many ways. It was well noted that
  having a larger interest rate could cause debts
  to grow too large for future graduates to pay off
  and cause them to default, as well as to have to
  pay off for the rest of their lives, or even to
  take these bills with them to the grave. Some
  grandparents end up taking out loans for their
  grandchildren to go to school and when the
  children default the grandparents sometimes end
  up having to have their social security checks
  garnished. People are having trouble living a
  life that is fruitful when their loan payments
  are large and end up having to pay them back for
  decades due to the high costs of the schools and
  coupled with higher interest rates. President
  Obama is interested in seeing a system that has
  the interest rate capped at the time the loan is
  awarded, and that loan repayments shouldn't be
  more than 10 of a persons' income.

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• One thing that can help to coming up with the
  cash to pay these loans as well as to make your
  payments on time is an installment or payday loan
  from Lenders. You never know when an emergency or
  something might come up that causes you to
  struggle to make your student loan payments. A
  payday loan can help you out trained and
  experienced customer service reps are available
  to help you out. Cash fast and money direct
  deposited into your bank account same day,
  usually within an hour. Getting a Loan from
  lenders can help you maintain those payments when
  times are difficult.

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• Thankfully congress re-convened on July 24th and
  passed another bill that has a similar increase
  to the interest rate, but allows for the increase
  to be gradual over time. The formula that will be
  used to gauge the interest rate charged will be
  to have the loan interest rate be based on the 10
  year Treasury note. So currently, for undergrads,
  that is 2.05 over the 10 year note, graduate
  students 4.5, and parents will be 6.3.
  People should be very relieved to hear that the
  current attending students will only be paying an
  increase to 3.8 for undergrads, 5.4 for
  graduates, and for parents sending their children
  to school the interest rate will be at 6.3. Over
  time the interest rates will go up and congress
  and the president hope that this will give our
  economy more time to bring more jobs and wages to
  the American people.

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